Monday, August 13, 2007

"As-Is" - What Does This Mean To You?

More and more I am seeing listings in the MLS that say something along the lines of "This home is being sold As-Is".  What does that mean exactly?  As a buyer, how should that affect your decision to make an offer on a home like that?  As a seller offering a home in as-is condition, what does that mean for you? 

Arizona Real Estate - As-Is TransactionsWith the market in the state that it is in currently the term "As-Is" is becoming more and more popular.  The banks that are attempting to sell their foreclosed properties don't want to put any more money into a house that they just want off of their books.  And sellers who are in dire straits and are just barely able to get by who have decided to sell their home in an effort to avoid foreclosure, probably don't have the cash on hand to perform repairs that a home may need.

"As-Is" simply means that the seller of the property is not able or willing to make any repairs to the home.  That's it.  The seller is still bound by state law to disclose all of the pertinent or material facts about the home (typically in the Seller Property Disclosure Statement).  The buyer still has the right to conduct all of the inspections that they wish, and even cancel the contract due to anything discovered during the inspection period.  However, the buyer of an "As-Is" property cannot demand that the seller make any repairs, as they have already agreed that the property would be offered "As-Is".

As a buyer, my advice would be that if the home suits your needs and you are, at least on the surface, comfortable with the condition of the house then make an offer.  Once you've got the seller's acceptance, you will then have your inspection period (typically 10 days) to discover any issues that are not obvious to the untrained eye.  Once we have discovered all there is to discover we can then make a decision as to whether or not you are okay with the items found.  If the answer is "Yes", then we go forward with the transaction, and hopefully we've been able to get you into a house at a very good price.

As a seller, I would advise not offering something "As-Is" unless it is absolutely necessary.  In our market, buyers have so much to choose from that you quite possibly could be turning potential buyers away even before they get to your front door.  Unless, of course, you would like to price the house so far under market value that you would be providing a potential buyer with such a deal that they might overlook any repairs that the home might need.

-Steve Nicks

[tags] Desert Ridge real estate, Phoenix real estate, As-Is [/tags]