What image do you get when you hear someone say he is buying real estate “as is”?
As a Buyer, what should you think when you see the words “as is” on a listing?¬† Is it a Red Flag suggesting trouble in Paradise?¬† Or just heads up to you to be careful with your due diligence?¬† In these days of Foreclosure and Short Sale transactions, the owners often are unable or unwilling to make repairs discovered in a Buyer’s inspection process.¬† These sales are often subject to “as is” clauses.¬† So what does it mean: Buying Real Estate “as is”?
First and foremost, “as is” clauses are not intended to eliminate the Seller’s obligation to disclose any material facts of which he is or should be aware relative to the condition of the home. As a Seller, “as is” is not a shield to hide behind when there are defects that are known.¬† In all cases, full disclosure of the facts is the best course of action.¬† When a buyer is buying real estate “as is, the “as is” condition of sale is only meaningful if the Buyer has knowledge of the alleged defect.¬† Even, and perhaps especially, mechanical components that are invisible to the casual observer, such as parts of a septic system, or results of environmental reports, if the Seller knows of the defects, he can still sell the home “as is” if he discloses those defects and the Buyer agrees to buy the real estate “as is”.
What if the sale price has been negotiated below what the Seller was hoping to settle on, and with the last round of negotiation the Seller stipulates that the sale is “as is”?¬†¬† When the Buyer performs his inspections, what does he expect to be done if something comes up that is unexpected? This can be a tricky situation.¬† The Seller expects to sell at that “rock bottom” price.¬† The Buyer feels that he has now been surprised by a defect, and may not be happy.¬† Ultimately the parties return to the three options of negotiation: accept the situation “as is,” negotiate a middle ground, or walk away from the transaction.¬† It all depends on the circumstances of the transaction: Did the Buyer get a really good buy and does he really want to buy this property?¬† …Is the Seller able or willing to make further concessions to the Buyer?¬† …Does either party want to find another partner to negotiate with? Another Buyer for this property, and another House for this Buyer?
These are situations where the value of an experienced Realtor comes into play.¬† The HomeVision Group has helped both Seller and Buyer clients in many situations such as this.¬† Contact us when you need a great perspective on transaction strategy.¬† Whether you find yourself buying real estate “as is” or just find a great buy for the home of your dreams, we are here to help you achieve your real estate goals.