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Is it common to buy a home 'as is'?

Posted by fori (My Page) on
Wed, Mar 9, 11 at 18:04

First off, yes I am using a Realtor, and I still don't think I need one if I were to purchase the type of home I planned on but THIS place...one look and whoa. I need an agent.

Anyway I'm negotiating on a house that is a bit of a fixer upper. Following the agent's advice (and seeing the owner's skill level) we made an offer "as is" with the intention of adjusting the offer after (several different) inspections. It seems odd, definitely not what I've done in the past.

I've seen what happens when one requests a new roof (won't make THAT stupid mistake twice) and it seems to make more sense to buy as is, especially on an older property. Is this more common than I realize?


Follow-Up Postings:

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RE: Is it common to buy a home 'as is'?

Basically, aren't most sales As Is? The buyer accepts the house in its condition, with the price reflecting the condition. Or the buyer declines to buy it if an inspection shows too many flaws.

Can you adjust your offer if they accept it? If you're having inspections, isn't that just normal? I think I'm missing something here.


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RE: Is it common to buy a home 'as is'?

In the past when selling, for example, I have been expected to fix items found faulty by the home inspection. Is that unusual?


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RE: Is it common to buy a home 'as is'?

"In the past when selling, for example, I have been expected to fix items found faulty by the home inspection. Is that unusual?"

I flat out refuse to fix things.

The price reflects the condition.

If you want a new house, purchase one (and then you get to fins the defects for yourself).


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RE: Is it common to buy a home 'as is'?

I think we should clear up some terminology here. When a house is offered "as is" it usually means that the seller knows there are flaws and wants to sell the house as it exists without bothering to fix anything, and without having you do an inspection and then come back for adjustments. If you make an offer to buy at a certain price and "as is" you are probably giving up any legal basis for doing an inspection or asking for any adjustments. It could be a good deal, but just know what you are signing and what you are signing away when you accept a property "as is."


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RE: Is it common to buy a home 'as is'?

As both a seller and as a buyer I prefer to get reductions in price rather than have a seller fix things. Around here typically when you contract for a house you have a 10 day period in which to do any inspections. During that 10 days the buyer can cancel the contract for any reason. So if major problems turn up the buyer can cancel or if the buyer finds another house or if the buyer just changes their mind, they can cancel.

Typically during the inspection if things turn up that weren't in the disclosures and the buyer doesn't want to cancel the buyer either requests they be fixed or asks for a credit in lieu of repairs. As a seller I prefer to do the credit so that the buyer can be responsible for repairs and can't second guess what I do. As a buyer I prefer the credit so that the seller isn't tempted to do repairs that are cheap rather than what is adequate.


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RE: Is it common to buy a home 'as is'?

I sell all my homes "as-is." I price them to reflect their condition. One was like brand new, the others were in great condition. But with any house, there are always things you could find wrong if you really dig. I am not into the game of a buyer getting an inspection and then nitpicking a million little things just to get me to lower the price after we agreed upon a price. I'm not going to let someone use an inspection as a negotiating tool. It is what it is. They can get an inspection if they want but only for informational purposes.

I wouldn't do that to a seller either. I recently made an offer on an "as-is" property. This particular house needs work and the seller is not going to fix a thing. I made my offer based on the work that it needs. She had it priced to reflect the work it needs. I guess you could do it the other way too, like your agent is advising you, if the "as-is" property is over-priced. Make the offer, get an inspection, tweak the offer. It probably depends on how it's priced to begin with. Hope that makes sense.

Here is a link that might be useful: Smith Mountain Lake Horse Property


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RE: Is it common to buy a home 'as is'?

I think Im missing something here. What exactly is "as is" about your offer if you intend on asking for price adjustments after "several inspections". Typically an "as is" offer is just that, "as is", unless something is so major that you choose to walk away, then the owner may choose to renegotiate with you. As is generally means, you are doing an inspection to educate yourself on the home but you have no plans of coming back to rengotiate for every little thing that is found.

I'm questioning the ethics of a realtor that would advise you to make an offer as is with the intention of doing several inspections and trying to rengotiate.

It seems the "as is" may be to get your offer accepted because there are several interested parties, then after those buyers are out of the picture, you will try to get the house for a lower price. A good atty with chew up and spit out your "as is" and bind you to that contract.


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RE: Is it common to buy a home 'as is'?

"As Is" contracts are used often here in FL because the new regular contract is really tough to use (won't go into that because it's another thread). We usually write them with standard "right to inspect" addendums.

What it means to the seller: you get what you see and what I told you in the disclosure

What it means to the buyer: I like what I see so far, and accept what you told me in the disclosure (assuming that it was completed before contract as is current custom), but I'm still getting an inspection to ensure the condition of the house is what we both think

So, if the buyer's inspection turns up new stuff (roof inspection usually, because you just can't see it well during a standard home viewing, and most people don't crawl through the attic either, or pool inspection, because nobody can "prove" there was that leak, but that's a whole other thread, etc), they can walk away, ask for it to be fixed (thus probably delaying closing) ask for repair funding held in escrow (usually a % over estimate), or ask for a credit (this is what I prefer as well, to keep closing on schedule), essentially re-negotiating.

Will buyers ask for credits for things they already knew about from viewing or disclosure? Sure they can, but that's poor form, IMHO. They should have already accounted for that in their initial offer.


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RE: Is it common to buy a home 'as is'?

Interesting. Thanks. I probably need a more accurate RE vocabulary.

My offer was based on what I could see and took visible condition into account. Inspections revealed some things we didn't see (which is probably why we had the inspections). Based on what we COULD see we suspected there would be things we couldn't. So I guess we did expect we'd be making some adjustments. Is that unethical? Should we have not made an offer until after inspections? Is that what you advise your clients do?

When I have bought and sold before, it seemed customary for the seller to repair deficiencies found during an inspection, like adding smoke detectors or treating for termites. We'd prefer to do that stuff ourselves.

C9, I think you pretty much described what we're doing. I'm not going to ask for a $20k credit for a roof that is obviously in need of replacement, even to a lay person. But termites, missing loadbearing walls, dangerous electric, falling chimneys...I somehow missed these!

But at least the pool doesn't appear to leak. :)

Thank y'all for your perspectives.


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RE: Is it common to buy a home 'as is'?

fori-
It's not unethical to have an inspection and ask for adjustments if warranted. However, in many parts of the country, that would be called a conditional offer subject to inspection, not an "as-is" offer. It sounds to me from others replying here that "as-is" does not mean the same everywhere. Bottomline: just make sure you know what your offer commits you to and what the implications and expectations are for the seller before you submit it.


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RE: Is it common to buy a home 'as is'?

Yes, I'm in the same part of the country as fori and kudzu's definition of as-is sales is how our realtor explained it---an offer with no inspection contingencies that is made based on the house as you see it. We looked at some houses that were being sold as-is, and our realtor advised us to ask for permission for a pre-offer inspection (but we didn't make an offer on any of them in the end). Down side is that you invest money in inspecting a house when you aren't yet in escrow; up side is that you don't offer too much if there are problems. They used to be more common for foreclosures and probate sales in the Bay Area, but I suspect that's changing with the volume of foreclosures way up and banks with less negotiating power. We actually ended up making an as-is offer on the house we got, but that was for other reasons (seller had several good recent inspections that we were comfortable with, and we thought that would boost us up when we couldn't go any higher financially---four years later, no surprises, so I think we're in the clear, though I probably wouldn't go that route in today's market).


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RE: Is it common to buy a home 'as is'?

When I sold my mother's house, the buyers presented an offer below the asking price. I told the realtor "no". We negotiated (interesting to be negotiating with your own realtor, but the listing was within days of expiring). Anyway, I stated a price and said that it would be "as is" with no repairs.
The buyers did have an inspection -- I did not ever hear any of the findings. Luckily the sale closed.
Good luck
Susan


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