According to Redfin, August 2023 saw a 5.9% increase in prices over 2022. The market has been quite volatile, with many buyers taking major risks to secure homes.
The term “as-is” in real estate listings and contracts is becoming more prominent. But what does it mean in the context of a real estate transaction? Both buyers and sellers should completely understand the concept before finalizing deals.
As-is defined
In a real estate transaction, “as-is” means the seller is selling the property in its current condition, without any warranties or guarantees. The seller is saying that they will not undertake any repairs, renovations or improvements to the property before the sale. Buyers should assume they are purchasing the property exactly as it is at the time of viewing.
Seller’s position
While sellers have no obligation to make repairs, they must still disclose known defects or issues with the property. Failing to disclose known problems can lead to legal complications.
Buyer’s position
In an “as-is” sale, it is largely the buyer’s responsibility to assess the property thoroughly, conduct inspections and decide whether they are comfortable with its condition. Buyers should budget for potential repairs or improvements. They should conduct thorough due diligence, including property inspections and research, to make an informed decision.
Inspections and negotiations
Despite the “as-is” designation, buyers typically have the right to conduct inspections on the property. These inspections can help identify any hidden issues or potential problems. However, the seller has no obligation to address or remedy any problems the inspection uncovers.
Even in an “as-is” sale, there may be room for negotiation. Buyers can still make offers based on their assessment of the property’s condition, and sellers can choose to accept, reject or counter those offers.
“As-is” sales carry a degree of risk for both buyers and sellers. Buyers take on the risk of purchasing a property with undisclosed issues, while sellers may encounter challenges finding a buyer willing to accept the property’s condition.
