Q: From what I have read, Sold “As Is” can cover anything from minor defects/repairs that the seller is unable/unwilling to do or can be major problems. What can a prospective buyer do to protect themselves?
A: Here’s the deal: An “as-is” sale really does only this: It informs the buyer that the seller has no intention of doing any repairs to the property, and puts the buyer on notice that he/she should have the property inspected thoroughly, as the buyer will be taking possession of the property in its current state.
Many sellers and agents insist on an as-is sale, whether the property is in pristine condition or is a major fixer. Short sales and bank owned properties (REO Listings) are also typically sold as is.
Now, in many jurisdictions, the laws and/or standard forms used in the state convert “as-is” into what we call “as-is/as-disclosed.” This is the case where the contracts and law of the state (a) require that a seller disclose any “material” defect of which he knows or should know, and (b) the contracts popularly used in the state or region incorporate the sellers’ property disclosures into the contract.
In an “as-is/as-disclosed” jurisdiction, the seller has the duty to inform the buyer of any problems or issues with the property that would make a difference in the decision-making of a reasonable buyer; that can help the buyer decide (a) whether she’s interested in the property, (b) for what price and on what terms — considering the repairs they may have to do later, and (c) which inspections to obtain to fully understand the property’s condition.
The first step a buyer can take in protecting themselves in an as-is sale is to fully read and understand the contract and the seller’s disclosures, including asking your broker, agent or attorney to explain what disclosure duties the seller owes you, in your state. Property Disclosures should be carefully reviewed, and any defects or work that the seller reports having done to the property should be investigated. Ask questions and request copies of work permits or warranties and generally get an understanding for what work this seller has had done to the home. If the seller was not the first owner, it can also be revealing to ask if he still has any of the disclosures from the preceding owner.
The second step in protecting yourself in an as-is transaction is obtaining inspections from a qualified inspector. You’ll want to have the property thoroughly and professionally inspected before the end of your contingency or objection period. At the very least, get a home inspection and any “special inspections” the general home inspector recommends. Ask your agent for referrals and hire a certified and/or licensed home inspector — not your cousin who happens to be really handy.
Consult with your agent and use your judgment. We generally advise our clients to have an overall home inspection, and a pest inspection. Of course, if the seller had just obtained a pest inspection from a well-respected inspector, we might forgo those.
In an as-is deal, inspection reports serve less as your launch-pad for a repair request than as your post-closing home improvement store shopping list. They are a way to begin understanding what needs to be done so you can get estimates and bids on the work before finalizing the purchase of the home. Think of inspection reports as a tool for making sure you are completely comfortable taking the home in that condition. If you are not, the reports can serve as an alert that you should back out of the deal or renegotiate with the seller (perhaps for a lower purchase price), given the defects revealed by the inspections.
Read and follow up on the inspectors’ written or digital reports by getting any further information indicated from the seller, obtaining “specialized” inspections as recommended, and getting bids for repairs needed before the expiration of your contingency or objection period.
If you, or someone you know is considering Buying or Selling a Home in Columbus, Ohio please contact The Opland Group. We offer professional real estate advice and look forward to helping you achieve your real estate goals!
The Opland Group Specializes in Real Estate Sales, Luxury Home Sales, Short Sales in; Bexley Columbus Delaware Downtown Dublin Gahanna Grandview Heights Granville Grove City Groveport Hilliard Lewis Center New Albany Pickerington Polaris Powell Upper Arlington Westerville Worthington