WHAT DOES “AS-IS” MEAN?
When browsing through real estate listings, perhaps you’ve wondered about the term “as is” in the description of homes offered for sale. What does this really mean?
The “as-is” label means that sellers do not want to repair the home or pay for it to be repaired. There are all kinds of reasons that a seller may decide to sell a home “as-is.” Perhaps they no longer live in the area and will be unable to oversee repairs. Maybe they are “upside down” on their mortgage and can’t afford to make any expensive fixes. Sometimes selling a property “as is” means that the home has serious hidden flaws which will be revealed by a thorough home inspection.
WHAT CAN A BUYER EXPECT?
In this situation, it’s really contingent on the buyer to do his homework and find out exactly what repairs are needed and how much they will cost. Sellers in Ohio, even when selling “as-is,” still must make a full disclosure of any known flaws; however, it’s very important for the buyer to hire a licensed home inspector to find out exactly how much work the property needs. It’s also smart to include a home inspection contingency in your agreement, so that you can back out if the repairs are going to be too extensive and costly.
ADVANTAGES TO SELLERS
Selling a home “as-is” offers some legal protection to sellers. It protects them from lawsuits in the event that the home is found to have material latent defects. It can also greatly simplify the negotiation process.
But sellers need to keep in mind that selling “as-is” may reduce their sale price. Buyers will expect the lowest possible price to compensate for the money they’ll have to shell out for repairs. Sometimes it’s more cost-effective to make necessary repairs so that you can command a better price.
If you’re considering buying or selling a home “as-is,” make sure that you get an experienced realtor to advise you on the potential benefits and pitfalls.