Before you enter the real estate market, you need to fully understand what it means to offer a home “as is”.
Buying or selling a home is a massive financial transaction which requires all parties to be informed and educated with basic real estate terminology. Your real estate agent and home inspector can be valuable resources throughout the process but ideally, as a buyer or seller you should keep yourself informed to ensure you understand the details and implications of potential offers you are presented with in the future.
Educate Yourself Before Entering the Market
You may find yourself in a situation where an individual or real estate agent is attempting to gain the upper hand in a deal utilizing vague or complicated terms. It is important to remember that the decision to buy or sell is always in your hands. If you don’t understand certain legal terminology, ensure you discover the true meaning of what is being said before continuing.
By educating yourself with a few of the fundamental terms, you will be much more prepared when entering the real estate market. One of the essential terms you need to understand is “as is”.
What does “As Is” mean in Real Estate?
When you agree to buy or sell a home “as is”, it means that the property will be exchanged in its current state. This comes with a understanding that no further repairs will be made and the new home owner will accept the property with any faults or issues that are currently present. Typically this agreement is spelled out in the transactional paperwork, signed and agreed upon with the offer or sales agreement.
What Does This Mean to You as the Buyer?
If you are considering purchasing a home and the seller is pushing to sell “as is”, you should proceed with caution. Suggesting an “as is” agreement indicates that there are underlying issues with the property. If there are issues, how much will it cost to repair them? Does this financially make sense considering the “discount” that the seller is offering. Selling “as is” can also indicate that the homeowner does not have a lot of time. They may need the funds for something else, such as purchasing another home. As the buyer, realize that an “as is” agreement presents leverage and opportunity but if you are not careful, it could be extremely costly to you down the road.
What Does Selling “As Is” NOT Mean?
This is where the term “as is” enters into a bit of a grey area. Many sellers believe that when they sell “as is”, they are relieved of all responsibility. This is absolutely not the case- it is still their responsibility to disclose all pertinent issues with the property.
As the potential buyer, deciding to enter an “as is” agreement can yield you quite a discount but it is imperative that you partner with a professional to fully inspect the home. You will need to know the severity of all the issues, the risk they pose to your family and how much they might cost you to repair. If you plan on trusting the seller and the real estate agents, who just want to make a sale, you could end up agreeing to a horrible deal; a deal that could put the health and safety of your family at risk.
How to Proceed
Now that you understand the basics of what “as is” means in a real estate transaction, you must remain vigilant in your future proceedings. Always bring in professionals when assessing the property and any of the corresponding paperwork for a deal. Protect yourself, your family and your financial investment by partnering with a home inspector that has credible industry experience and a deep knowledge base in real estate.
Avoid an “as is-disaster” and call Building Pro to assess your next potential home!