AS-IS Homebuying - What it really means

During the heyday of foreclosure home buying, #AS-IS  (sometimes referred to as  AS-IS, Where-Is) meant that the buyer would make absolutely no repairs.  You bought all the problems with a property when you signed on the dotted line.  After your inspection, you either bought the property or you didn't.

With a "normal" sale, after an inspection is completed on a home, the prospective owner usually has some sort of list of things that they would like to have repaired.  This list can lead to negotiations that might change the terms of the transaction.  With an AS-IS property, there is not supposed to be a list of repairs.  The buyer is just supposed to either take the property or not.  There is one exception to this rule:  If a defect in a property is uncovered that would stop another buyer from purchasing the property, there might be room for further negotiation of terms.  For example, a cracked foundation, the presence of mold, discovery of termites - things that a bank will not allow to exist prior to issuing a mortgage.

However, minor things are not on this list - especially those things that can be discovered simply by being observant when going through the house.  Things like missing cover plates on electrical sockets and switches, burnt out light bulbs, absence of a tilt guard on a stove and drywall repairs should not be something that an owner of a home being sold AS-IS should be asked to repair.

There seems to be a pervasive idea out there that the AS-IS clause or addendum in the contract is something that can be ignored if a prospective owner wants anything repaired.  Unless the Realtor properly prepares their client, submitting a list of repairs to a home owner after having established the transaction with an AS-IS clause or addendum may be considered to be dealing in bad faith.  This could open up the Realtor to potential litigation.

So please, when you submit an offer for a client to own a property in AS-IS condition, prepare your clients properly, and keep yourself out of the muck!


#Avondale , #Goodyear , #Buckeye , #Glendale,  #Phoenix, #Surprise, #Peoria, #Tolleson, #Laveen, #Waddell , #Wittman