Your clients have found an “as-is” home, but they’re not exactly sure what they’re getting into. As their advocate, it’s up to you, the real estate agent, to explain exactly what that entails.
“Technically, the term means the owner is selling the home in its current condition and will make no repairs or improvements (or give the buyer any credits to fund these fix-its),” Lisa Johnson Mandell wrote in an article on Realtor.com.
That could be because of a number of reasons, including foreclosure, the home was inherited and the new owners don’t know if anything is wrong with it, or they just don’t want to spend the money fixing up a property they’re selling. The list goes on.
In any case, according to Mandell, “…if you buy this house, you buy any problems it may have, too.”
Pros and cons of “as-is” homes
According to Mandell, the upside of buying an “as-is” property is it’s usually priced lower with the possibility of going down even more in price, and, if the buyers are handy or they’re seeking properties to flip, this type of sale may work out.
On the other hand, if a home is listed “as-is,” there’s bound to be a few things wrong with it. Some issues may be obvious to the buyer, but others may not.
“You might think you’re getting a killer deal, but you could also be throwing your life savings into a black hole,” Mandell wrote.
Should your clients buy a home “as-is?”
If your clients have decided that they want to go ahead with the purchase, there is one step they must take: Hire a home inspector to give the property the once over. There have been reports of potential buyers in hot real estate markets forgoing the home inspection process, but that’s not a good idea with an “as-is” home. Although the sellers will most likely not fix any problems found, the home inspection still serves an important purpose, according to Mandell.
“Provided you place a home inspection contingency in your contract, this means that if the inspector unearths problems you don’t want to address, you can walk away from the deal with your deposit in hand,” she wrote.
Source: “What Does ‘As Is’ Mean?” Realtor.com (Oct. 14, 2016)