What Defines an As Is Home?
Buying Homes With No Guarantee May Not Mean Buying a Bad Home
The perfect property has been found after many months of searching, only to be told the property is being sold “as is”. When the words “as is” are spoken in terms of housing or automobiles, the buyer instantly changes from interested to scared to death. A house is one large piece of investment, and no buyer wants to go into such a huge investment with the idea lagging right behind them that the “as is” must be pointing to something expensive. Are the fears worth the pain and stress? Or, are “as is” properties okay to buy?
Definition of "As Is"
First, the term "as is" will need to be defined. An “as is” home means just that, the home is being sold in the current condition with no further changes being made by the seller before the sale. Many home buyers will walk through a home prior to a sale and list the little fixes they wish to be made before the sale is final. Home buyers nearly always have a home inspector tour the home as well, making sure there are no problems that may eventually make the home unlivable. But, with an “as is” sale, the home buyer has no one to complete the little fixes, and if there are big fixes found with the home inspection, the buyer is responsible for those as well.
On the flip side of the coin, many homes listed in “as is” condition are in great shape and need only minor repairs. But, how can a buyer know this about a home without entering in to a contract with the seller?
Rules for Buying "As Is" Homes
There are two rules of thought in regards to buying an “as is” home. The first, the buyer can hire a home inspector, at their cost, to tour the home before writing a contract for sale. This way, the buyer will know what they are getting into before they initiate a contract. Now the buyer must keep in mind that the home is still on the market while the inspection is being done. So, if another buyer comes along and is willing to take a chance on the home, the buyer may lose the chance.
The second rule of thought, is a post contract inspection clause. When the contract is written, the buyer can be as specific as they like. A clause written in to the contract regarding the “as is” nature of the home and the need for an inspection before final proceedings, will alleviate any legal bind to the home. What this means for the buyer is, if the clause is in place and the home inspection goes bad, the buyer will be able to slip right out of the contract and be no worse for the experience.
Understanding the Term "As Is"
An “as is” home can be a risking situation. If homeowners choose to think about the sale for too long, someone else may take the chance, but if homeowners are too quick to write a contract and forget the “as is” clause, they could be stuck with a home needing thousands of dollars in repairs. Home buyers need to understand the finality of an “as is” home and approach the situation in a definitive manner.
