“As Is” Home – Deal or No Deal?
You’ve probably seen listings stating a home is being sold “as is.” Does that mean it’s a dump and not worth seeing? Most likely not, but there can be vast differences in the conditions of “as is” homes.
If you do make an offer on such a home, you need to take certain steps to protect yourself. Here’s how:
What does “As Is” Mean?
Basically, “as is” means the buyer will purchase the home from the seller in its current condition no matter what since the seller has no intentions to do any repairs to the property before they sell it.
The home could be in pristine condition or it could be a major “fixer upper.” Smoke detectors are the only thing legally that need to be working properly!
In today’s market, owners listing “as is” homes are often banks, which have taken them back through foreclosure, or distressed homeowners trying to get a short sale. Banks are usually unaware of the conditions of foreclosed homes and by selling “as is,” they can protect themselves from any liability.
To Disclose or Not to Disclose…
Some states require that sellers disclose any defects they know about in the home. Maryland and the District require sellers to provide detailed disclosure documents. Virginia, on the other hand, is more of a “buyer beware” state.
If sellers, however, know of something but didn’t disclose it, that is considered fraud and the sellers would be liable. Sometimes it is difficult to prove if sellers really did know about the condition. It’s important to get any disclosures in writing to protect you in the long run from fraudulent information.
Be proactive and ask about any repair history. Did the seller have water damage at one time and made repairs and now it isn’t obvious to the buyer or the inspector? You want to know as much about this home as possible, especially any water damage history!
If you included a home inspection contingency in your offer (which you always should), you are given a window of time to get the house inspected. The results will help you decide whether you will continue with the transaction or not. You can walk away if you aren’t comfortable with buying the home.
Make sure you get a qualified inspector so you can get a thorough idea of the home’s condition. Does it have a leaky roof, any water damage, foundation issues, and pest or termites history.
If there are necessary repairs to be made, get bids from contractors during this contingency period to have a better idea of future costs. These estimates could help you at the negotiating table to bring down the price of the home.
Take It, Or Leave It
Overall, an “as is” home could be a good deal as long as you take the proper steps to protect yourself. It requires more due diligence on your part and definitely more thorough inspections.
You can “take it or leave it” and that’s the beauty of it. If you’re not comfortable, then you can always walk away if you’ve included the right contingencies in your offer with the seller.