A simple term like As Is can have many meanings. When used in the world of real estate, it goes to a different parallel. The ambiguity of the statement may not be what you want when selling your home, or maybe it is! Here are some things to consider when you sell your home as is.
The real estate business is always full of intrigue and surprise. Often I am presented with situations that, not just require but demand deep thinking. Sometimes that deep thinking finds it’s way into the articles I pen. This happens to be one of those times.
After negotiating a homes price and moving your stuff, the home inspection process may be next in line for things a home seller dreads the most. Not many home sales happen these days without a home inspection being part of the purchase process. The purpose of the home inspection is to find out if something is wrong with the home (Reminds me of a physical). You can’t wait for the doctor to say all is fine and you will live forever.
One way home sellers believe they can navigate by the whole home inspection thing is by offering the property As Is.
Firstly, let’s look at how our local multi-list, Trend MLS, categorizes the As-Is condition status. There are four property condition statuses for Realtors® to choose from; Average or Above, Fix-Up/Needs TLC, Shell, and As Is. Let me state for the record that while the first three can justifiably be considered property conditions, “As Is” is more a condition of the deal or sale.
The As Is status is defined by Trend as follows, The Property will Transfer in its Current Condition. Interestingly enough, most home sellers believe that is what should happen in the first place. If there were a known material defect or an issue that impacted the safety and well-being of an occupant the seller would remedy the condition before offering it to someone else or offer the home at a discount in consideration.
Will listing a home for sale using the “As Is” status stop a home buyer from asking for a home inspection? Not likely. Buyers and their agent may not even notice the “As Is” status of the property. Even if they did, it is unlikely that it would deter a would-be buyer from asking for inspections.
Know that if you sign an agreement of sale with inspections, the buyer has the right to void the deal if there is something that surfaces in the inspection report they do not like. The agreement you signed with inspections gives the buyer the right to void or ask for repairs and therefore overrules the “As Is” status. An agreement can also have a mortgage contingency which could lead to property condition investigations through the appraisal process. A true “As Is” sale contains NO home inspection conditions whether they are from the buyer or the process of lending money to purchase the home.
In my opinion, a seller would consider using the “As Is” status to convey that the home is in as sale-ready condition as they are willing to make it and will be transferred to the new owner that way. In some cases, I would advise the seller to have a pre-listing home inspection done by a certified home inspector. This way they would have a third-party professional opinion as to the condition of the home. If the pre-inspection uncovered an unknown adverse condition, it could be addressed immediately either in fixing the issue or adjusting the sale price to compensate. Now the “As Is” status, and likely the sale price would hold more gravity.
One of the perceived negatives to using the As Is status is that some home buyers will think the home is in disrepair. It is my opinion that not many people use the property condition status to search for homes. If a buyer were looking to purchase a home to fix up, they would search using the Fix-Up/Needs TLC or Shell statuses.
I, for one, like the As Is status. It clearly defines the position of a home seller. As long as all the laws are followed that adhere to State Property Disclosure Law, I see little downside to the practice.
Knowledge is Power!