What Selling “As-is” Means For Buyers
Selling a home as-is can mean a bunch of different things depending on who you are. If you are a seller then it can be a path of least resistance where you don’t have to run around fixing up the place and incurring expenditures. If you are an investor than this may be a trigger that a good opportunity may await while the average buyer may see it as a red flag.
What Does “As-is” Mean?
When a home is listed as such it essentially means that the seller is selling the home in the current condition that it is in and will make no repairs or improvements before the sale. This also means that buyers should be prepared to not ask or negotiate for any credits to fund any necessary repairs. In some instances it could be that a homeowner is listing it in “as-is” condition as they do not have the funds available to make any improvements or repairs. Finally, another situation is that a home may have gone into foreclosure and is currently owned by a bank or may have been left to relatives if they have passed. In these cases the owners are far enough removed where they would not be armed to make such repairs. However, just because it may be listed “as-is” does not mean that a listing agent can avoid disclosing any known defects of the home. Sellers will still need to disclose known problems and the buyer can still make the deal contingent on a home inspection.
The Good And Bad About As-Is
If a home is “as-is” then it is implied that it needs significant improvement and all buyers should not be looking for the seller to be doing any repairs prior to sale. Typically the list price will reflect the condition of the home and sellers may even accept lower offers in these cases where it is worth it for a buyer or investor to make the purchase. In particular, an investor’s interest will be piqued when a home is listed this way. In cases of a home needing such significant repair that obtaining a mortgage could be problematic, sometimes they are listed as “cash offers only.” Cash buyers typically leverage their buying power by offering a fast sale with no mortgage red tape in exchange for a lower purchase price. The big caveat to any buyer is that anything could be wrong with these properties where a significant amount of capital investment is required.
In the end a buyer should still do their due diligence and proceed with a home inspection so that they know exactly what the home needs for repair regardless of the seller not participating in them. Inspection contingencies can still be added into the deal to cover you and you never know what sellers may negotiate on a selling price depending on inspection results!