As you look at listings online, you may come across a few that are listed in “as-is” condition. Those few words can have a big impact on your transaction, so it’s important to understand what they mean going in. With that in mind, here is a primer on “as-is” condition in real estate. Keep reading to learn what the term means and how it will affect you as the buyer.
What does “as-is” condition mean in real estate?
In a typical sale, after the buyers do all their inspections, they’re given a chance to negotiate any recommended repairs or remediation with the sellers. Usually, the sellers will agree to have some portion of the work completed by a qualified professional or, alternatively, they will agree to give the buyers a credit towards the cost of the work work.
Whenever sellers list their home “as-is”, they’re essentially saying that they intend to sell the home in its current condition. As the buyer, making an offer on a home that’s being sold “as-is” essentially means that you’re willing to accept responsibility for any work that needs to be done to the home.
Can you still do inspections?
Many buyers, especially first-timers, wonder if buying a home that’s listed “as-is” means that they have to skip inspections entirely. However, that’s not the case. You still have the option to do inspections “for your benefit”, meaning that they would be informational rather than serving as a point for negotiation.
It’s in your best interest to do inspections, even if they’re only for your benefit because then you’ll be able to get a sense of how much work needs to be done on the home. Plus, if you find that the house needs more work than you can handle, you’ll have the option to back out of the deal.
The pros of buying a home “as-is”
The one big benefit of buying a home that’s in “as-is” condition is that you can usually get it for a better price. Since the sellers are unwilling to negotiate on repairs, they’ll often price the home lower than would be expected in order to make their property seem more attractive to potential buyers.
The other benefit is that you’ll have more control over any repairs done to the home once you’re the homeowner. In a typical sale, the sellers get to choose who does the any repairs that they’ve agreed to make. In this situation, you’d be able to hire professionals that you trust.
The cons of buying a home “as-is”
That said, buying a home in “as-is” condition does come with some risk. Even if you do your inspections, the recommended repairs could end up costing more than expected and, in this case, you’d be the one responsible for footing the bill.
The bottom line: There's nothing wrong with buying a home as is, as long as you know what you're in for. Inspections are definitely recommended to help with that knowledge.
This article written by Tara Mastroeni for Forbes real estate. Click here to read more.