Is It “As Is”? Or Isn’t It “As Is”?

 Say that 5 times real fast! Believe it or not, there once was a time when writing an offer “As Is” was relatively rare. Even in 2008 most offers I’ve seen and written are of the “As Is” variety. Most of the reason for this is because, in this area at least, sellers, for the most part, have taken on the responsibility of initiating pest and property inspections before putting their homes up for sale. Buyers can educate themselves about the subject property before writing an offer and can thereby make a decision as to whether or not the flaws and problems with the place are tolerable or workable to them. As you might have guessed…seller’s like to see an “As Is” offer.

Here’s the thing: “As Is” doesn’t always mean “As Is”…even though most sellers think it does. A buyer entering into an escrow with an “As Is” sale can still do further inspections on the subject property. If the further inspections turn up an issue not on the original disclosures, or in the sellers inspections, the buyers have the right to either change their minds about the purchase, or ask for the problem to be resolved by the seller. A few years ago, representing a buyer, I sold a house “As Is” where the seller had, mistakenly, not done a property inspection. We did one, and discovered a foot of standing water under the house. I recommended the buyers get an engineer to look at the house and he discovered some early stages of foundation problems that were developing as a result of the bad drainage. He gave us a bid of $25,000 to correct the problem. We gave the $25,000 bid to the seller…she paid it. Her alternative going forward (if my buyers backed out) would have been to now sell the house with both our property inspection and our engineer’s report and bid. Certainly that would have effected the home’s marketability and who knows how much longer it would have taken for her to get a new buyer.

I’ve seen this happen several times. If you’re a seller, always do inspections up front and know what’s going on with your home. If you’re a buyer with an “As Is” offer and you have some questions or concerns about some aspect of the home, don’t be afraid to do further inspections.

Comments

  1. Caveator emptor (buyer beware) applies on any business transaction.

  2. Jim, When there is a buyer agent, it is the buyer agent beware, not the buyer any longer. At least, in Connecticut it is. We sell estates and foreclosures here. If the listing states “as is, where is without warrantee or guarantee of any kind” the Seller is covered. However, the moment you allow a home inspection, your as is clause if off the table, signed or not. Been there, seen it happen:) A very good attorney was able to explain this to all parties:) Always check with a good attorney, it will save everyone grief and time.

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