Home Buying in Phoenix>Question Details

Abuyer, Home Buyer in Scottsdale, AZ

property listed 'as-is' What does it mean.?

Asked by Abuyer, Scottsdale, AZ Wed May 19, 2010

good location,low price, looks okay

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Make sure you have an inspection contingency in your contract. That way if it fails the inspection you are out a few hundred$ but walk away clean. The inspection should show the real problems a house has. ONly have the inspection done after your offer is accepted.
2 votes Thank Flag Link Thu May 20, 2010
Abuyer,
AS IS means without guarantees as to the condition. The premises are accepted by a buyer or tenant as they are, including physical defects without any warranties. I've provided a sample copy of the Arizona Association of Realtors AS-IS form on the link below. Always get an inspection done even when you are buying an "AS IS" property.

Stephanie Weiss
http://StephanieWeissMoves.com
1 vote Thank Flag Link Thu May 20, 2010
"AS IS" means that the seller is unwilling or unable to complete any repairs to the property. In these situations you need to conduct whatever number of inspections you need to in order to determine the true condition of the property.

Bank Owned Properties and many Short Sales are sold with this condition in the contract. However, it has been my experience that "AS IS" may mean a Maybe on repair items on Bank Owned Properties, particularly if they become contingencies on the Buyer obtaining financing.

The Arizona Contract provides for certain items that the Seller must have in working order at closing. By adding an "AS IS" clause to the contract, the Seller is refusing to repair those warranted and/or any other repairs that the property may need.
1 vote Thank Flag Link Thu May 20, 2010
I can see it needs work and that is okay. That's why the price is low. I am only worried that there is some big thing wrong, and the price isn't low enough for a tear down. It looks like a cute house needing alot of work. The home-buying books tell horror stories of -un-fixable problems ending in demolition and we don't want to go there. Well, okay if you know that you are buying an empty lot for cost of house and cost of demo.
1 vote Thank Flag Link Thu May 20, 2010
can I get a mortgae if it is 'as-is'? I expect it depends on wheather the house has big problems
1 vote Thank Flag Link Wed May 19, 2010
as-is means the seller is not going to do any repairs on the house.

It does not mean they can not disclose problems they know it has.

It could also mean it is a foreclosure.

p.s.Sometimes the listing says as-is then problems are brought to the sellers attention and they fix them. Sometimes the person is already losing money or breaking even and refuse to spend more.
1 vote Thank Flag Link Wed May 19, 2010
Great information from Scott, nothing more to add.

I hope everything works out for you.
0 votes Thank Flag Link Thu May 20, 2010
"As Is" is usually liste don bank owned or short sale properties. The term refers to you are buyingthe house as is and the seller is not going to make any changes or repairs to its current condition.

There are 2 important things to note. When buying a bank owned, soem banks will not allow an inspection contingincy, other banks will allow one but it is for your information purposes only, they will not renegotiate the price or make any repairs if the inspectrion finds anything.

However if you find a hidden defect, meaning somthing you can not see with your naked eye such as the water test fails, septic test fails or you find termites then by all means you can ask the bank or seller to make repairs even though it is sold as is. Most times they will make the repair as if they dont, they will lose you at a buyr an dthen have to lower teh price substantially to attract a cash buyer so the repair adds value to their property.

Things not included that you would have been able to see are missing handrails, peeling paint, water stains or leaks on the ceiling and making sure teh water works in teh house with no leaks and teh furnace turns on and works.

When buying a property inspect the house for yourself using your eyes and your agents eyes from top to bottom, most things can be seen and should be addressed in your initial offer.

good luck with your purchase
Web Reference: http://www.ScottSellsNH.com
0 votes Thank Flag Link Thu May 20, 2010
Also if it's a short sale, it may not even be possible to buy it at the full asking price. Short sale asking prices are "ficticious". The lender will do their independent appraisal once a contract is submitted. They will then give a counteroffer if the price is too low.

Also if you're not paying ALL CASH, you may have problems with financing depending on what repairs are needed. You can get an FHA 203K Simplified to finance the repairs that will be made after closing.

Find a Realtor that will work for you and help you find the best deal.
0 votes Thank Flag Link Thu May 20, 2010
Dan's advice here is excellent.

While "as is" means that you're buying the house in its present condition--that the seller isn't going to make any repairs--it doesn't leave you unprotected. In fact, frankly, you're as protected as if you were buying a house without it being "as is."

For example, the seller still has to disclose anything he's aware of. And that also means that you can have the home inspected. And it means that your contract may (and should) provide that the contract is contingent on a satisfactory home inspection. So you do--and can do--everything that you'd do with any home purchase. The only thing you know for sure is that if you discover some problem, the seller is saying they're not going to fix it.

So you make an offer that reflects any apparent defects or problems. And you probably make the offer somewhat lower than that (somewhat lower than if it weren't being sold "as is") to take into account problems that you might find that the seller has told you up front that he's not going to fix. (Hey, in some ways that's better than a traditional sale. In a traditional sale, you don't know whether the seller's going to be willing to fix the problems. At this way, you know that going in.)

You have the home inspected. And you bring in any other experts as necessary (structural engineer, for instance), just as you would with a traditional purchase.

You evaluate what the inspections have found, and you decide whether or not to proceed with the purchase.

Buyers sometimes assume that sellers of "as is" properties are trying to hide something. Sometimes, but sometimes not. Banks, for instance, sell foreclosures "as is" because they don't want the hassle of getting into repairs. Lots of times estate sales are of "as is" properties because the heirs don't have the money the money to put into possible repairs; they just want to sell the house. Investors often buy houses "as is" because it strengthens their offers. The sellers know that they're not going to be nickeled and dimed with all sorts of repairs.

So, just be careful going in and protect yourself the same way you should in any purchase. Your Realtor can help with the specific language and contract provisions.

Hope that helps.
0 votes Thank Flag Link Thu May 20, 2010
Don Tepper, Real Estate Pro in Fairfax, VA
MVP'08
Contact
You said, "can I get a mortgage if it is 'as-is'? I expect it depends on wheather the house has big problems".

You are correctamundo! What type of loan are you using?

What exactly are the needed 'corrections/repairs'?

How good is your mortgage lender?

How good is your buyer's agent?
0 votes Thank Flag Link Thu May 20, 2010
It means that the seller is disclosing upfront that they are unwilling to pay for or agree to the cost of any needed repairs that might be disclosed via home or termite inspections.

But as is often the case with real estate transactions, the actual outcome of the transaction is dependent on MANY variables. If you've not secured the services of an experienced, competent, full time Buyer's Agent/Realtor, then you would be wise to do so right away.

All the best!
0 votes Thank Flag Link Wed May 19, 2010
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