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What It Means To Sell “As-Is”
July 25th, 2007 categories: Home Inspection Tips, South Tampa, Tampa Condos, Tampa Florida Real Estate, Tips for Sellers
It sounds self explanatory, but understanding what “as-is” means with regard to selling or buying a home usually takes some explaining.
When homeowners put the home on the market, they have a choice to sell the home in its current condition (as-is) or offer to make repairs for the buyers before the transaction closes. We always recommend a home inspection before the marketing process begins. That way the seller is made aware of any problems that may come up when the buyers have their own home inspections done. The seller can either make the repairs before putting the home on the market or wait for the buyers to request certain repairs. Alternatively the seller can offer the home in its as-is condition and price the home with regard to any repairs that need to be made.
But here’s what usually happens in an as-is sale: The buyer will agree to purchase the home as-is but with the right to inspect the home for say, 10 days or so. A smart buyer, or one who is well represented, will also have the right to cancel the purchase based on the results of the home inspection(s). Or they may have the right to cancel the purchase if necessary repairs exceed a certain dollar amount.
So the buyer, in holding the “right to cancel card”, certainly has a strong asset in negotiating any repairs, price reduction, etc. If the buyer finds any major repairs that need to be made, that buyer will most likely ask the seller for some help. The buyer may demand a price reduction or that some cash be held in escrow to pay for the repairs. And if the seller does not agree? The buyer may just walk, especially in this market, where more realistic sellers with a home that needs no repairs may be just down the street.
Hopefully, for the seller, the home inspection passes with flying colors and the buyers accept the home in its “as-is” condition, waive the right to cancel, and proceed to closing. Which brings us back to the pre-listing home inspection, something we always recommend. Our advice, especially in a strong buyers’ market, is to get the home professionally inspected and make repairs before putting it on the market. A seller can then have confidence in promising to make any needed repairs for the buyers because no repairs will be needed.
But maybe a seller has major repairs to make but no cash to make them. Then be sure to disclose all known repairs that need to be made and price the home accordingly, or be ready to give up some proceeds from the sale so that the buyers can make the needed repairs.
Also Read: Why Hire A Home Inspector?
2 Responses to “What It Means To Sell “As-Is””
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In response to your “as is”, many buyers from the north frequently ask me why the seller is selling as is? They always think that something is wrong with the property!
As you mnetioned,I also explain that the inspection period is a time to determine in their sole discretion if the property is acceptable to them after having the property professionaly inspected. Vey good explanation for “AS IS”!!! Enjoyed your article!
Thanks Janis. “As-Is” does put a touch of “buyer beware” on it. Around here many agents will use “As-is for seller’s convenience”What about the buyer’s convenience? This is a buyers’ market!