Client: Is As-Is Really As-Is?

Is As-Is Really As-Is?

With inventory levels at a record low, Sellers are holding the cards again. We are seeing properties go into multiple offers and buyers are scrambling to put forth their best and final offers. Buyers want their terms to be more attractive than others offering on the same properties. One of the ways to differentiate an offer is to take the property “As-Is”.

The spirit of an As-Is offer is that the buyer agrees to take the house as it stands today. Issues with the home are inherited by the buyer and the seller doesn’t need to make the repairs.

However, As-Is doesn’t always follow the rule that you get what you get and you don’t get upset.

To begin, while the buyer isn’t protected by the inspection contingency of the real estate contract, they can still perform an inspection on the property. If they find issues with the home that weren’t disclosed and they don’t want to pay to repair, they oftentimes ask for these repairs or a credit to fix it themselves. The prospective buyer can also flat out cancel the deal under the As-Is contingency in the contract.

This can be an exasperating situation for the seller and listing agent as they may have turned down other deals for the allure of an As-Is deal. Many sellers were unaware that the prospective buyer could still request repairs.

As-Is Buyers

A good rule of thumb for As-Is buyers is not to ask for small repairs that easily could be fixed by a handyman, plumber, or electrician. If you are going to make a repair request, it should be something expensive you had no idea you would need to fix and if it weren’t paid for by the seller, you would want to walk away from the deal. Examples might be a house needing a new roof, an inoperable HVAC system, or mold.

As-Is Sellers

Having an As-Is deal is certainly preferable to having a deal bound by the inspection contingency. Both the buyers realtor and real estate attorney should be counseling the buyer to not sweat the small stuff. You just need to bare in mind, they can ask for repairs, big and small, and they can cancel the contract if the inspection reveals issues with the home. An As-Is deal is not a 100% guarantee your deal will close.

Presenting an As-Is offer will set you apart from competitive bids. Buyers should try to act in good faith and only request repairs that are truly unforeseen and cost prohibitive. Sellers need to just be aware that accepting and As-Is deal does not mean they will not have to make any repair concessions.