Selling a property as is seems to be a good bargain for sellers. Sellers are not required to rush about sprucing up the property.
However, what does an as-is property sale imply for buyers? When searching through property ads, some individuals interpret the phrase “as is.”
Others, such as real estate investors, may regard an unfinished home as an opportunity. Prospective purchasers may be confused as to what “as is” really means.
What does “as is” in real estate imply when you sell a house?
When a real estate agent offers an sell your house as is, it indicates the homeowner is selling the property in its existing form, with no plans to make repairs or upgrades before the sale (or negotiate with the buyer for any credits to fund these fix-its). The phrase “as is” is seldom used for a pristine and move-in-ready home sales listing.
On the contrary, as-is properties in disrepair are often sold because the homeowners or other sellers cannot afford to rectify these faults before selling (which would help them sell the home for a higher price).
Alternatively, a property may have been in foreclosure and is now held by a bank, or the seller may have died and left the house to heirs or an estate agency who have no knowledge of what is wrong with it but need to sell.
For whatever reason, the present sellers are unwilling to fix up a house before selling it. They just want to sell the property and move on. All of this implies that the buyer inherits any difficulties that the residence may have.
When a real estate agent puts a house for sale “as is,” the buyer’s legal rights are unaffected. The listing agent must still require the seller to disclose known issues, and the buyer may still make an offer dependent on a real estate inspection with the final transaction.
The compensations of as-is house sales
So, how can the aforementioned opportunity be “as is” if the buyer is taking on all of those problems?
It all boils down to money. Those two brief phrases in a listing generally imply that the house is a fixer-upper. The home will have a relatively modest list price to begin with, and the sellers may accept even lesser bids.
If the difficulties with the home preclude it from qualifying for a mortgage, a real estate agent may even market it as “cash offers only.”
If the potential buyers are contractors or skilled with a hammer, seeking for a house to flip, or just looking for a great deal, the offer of an as-is sale might be music to their ears.
Cash buyers and corporate investors hunt for house owners who want to sell quickly but are willing to accept a low list price in return.
However, the disadvantages of an as-is attribute are evident and should not be overlooked. There might be a variety of problems with the residence that are not immediately evident to the naked eye. Buyers may believe they are getting a great bargain, but they may be tossing their life savings down the drain.