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Pam Ng, Other/Just Looking in Mission San Jose, Fr...

My house is sold as-is condition. Will the potential buyers still need inspection?

Asked by Pam Ng, Mission San Jose, Fremont, CA Tue Apr 24, 2012

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As pointed out below, your declaration that the property being sold as-is does not negate inspections. In fact, selling as-is is more likely to inspire inspections.

These days most buyers are savvy enough to know they should have them. If you want to preclude inspections being done you could have pre-sale pest and contractor inspections done by respected local inspectors but many buyers will want to do their own anyway.

Best Regards,

Lance King/Owner-Managing Broker
lance@fixedrateproperties.com
415.722.5549
DRE# 01384425
1 vote Thank Flag Link Wed Apr 25, 2012
As-is has nothing to do with inspections. As - is indicates the seller has no desire to pay for any work that needs to be done on a home. However, the buyer (if smart) will get a roof report, home inspection, termite inspection and a chimney inspection. If a seller is smart and savy, they would have ordered and paid for the inspections before the home went on the market. The reason is this: If a buyer doesn't have inspection reports to view before writing an offer, they very well may decide to try and renegotiate the offer after getting the inspections done. Especially if there is a sugnificant amount of work to be completed. Which is very logical. Better to know if there is work to be done before the offer is written. My motto is:
Web Reference: http://jimmauldwin.com
1 vote Thank Flag Link Wed Apr 25, 2012
As is means that the seller is not willing to do any work on the property. It is the buyers responsibility to see that there is nothing that could potentially become a major problem for them. This is why any buyer should have an inspection
1 vote Thank Flag Link Wed Apr 25, 2012
I often sell properties that are owned by estates in probate that, by law, are sold as-is. For the buyer, there are really 2 issues:
1) Understanding the costs of repairing the property to their standards after the sale
2) Getting a loan. Many banks don't play the as-is game. They want the property "made whole" (repaired) to a certain level or they won't provide the purchase mortgage. I've had listings sit on the MLS unsold for months because no buyers could get financing due to the condition of the property and the seller did not have the resources to make repairs. Eventually a cash buyer comes along or the purchase is funded by a non-traditional lender.
1 vote Thank Flag Link Tue Apr 24, 2012
Yes, I recommend my buyers do an inspection even when the sellers request as-is. We don't want to nit-pick, just make sure there isn't anything horrible.
1 vote Thank Flag Link Tue Apr 24, 2012
should the buyer do the inspection b]efor they sign the contract kileighhawk@aol.com
Flag Fri Mar 20, 2015
Of course, the buyers need to know what condition the home is in. If there are too many repairs needed the buyers will have the option to cancel.
1 vote Thank Flag Link Tue Apr 24, 2012
Yes, they will probably get inspections so they can calculate how much they wil have to spend to fix the house. For example, if the termite report shows that there is an active termite infestation and the house needs to be tented, they will normally be given a quote so they know what they are looking at and if the roof inspection reveals that a new roof is needed they will have to consider that cost as well., When a Buyer sees "as is" it sometimes raises a red flag and they think there is something major the Seller knows about but is hiding so they tend to order more inspections. The terms of most contracts allow the Buyers a reasonable time to have any and all inspections they want and then to either accept the property or cancel the contract without penalty.If the Buyer feels the combined cost of repairs is too high, rather than cancel the contract he may try to renegotiate the price.
1 vote Thank Flag Link Tue Apr 24, 2012
I sure hope so!

As-is means that the buyer and seller have not contracted for the seller to make repairs, and the buyer is taking the home with known conditions. There is an as-is addendum which explains your duties as a seller, that is you have a duty to DISCLOSE. And the Buyer has a duty to INVESTIGATE.

When I have a seller who wants an as-is sale, I always recommend that the seller obtain their own inspections up front and disclose those inspections to the buyer. This way the buyer is going to be making an offer based on the known conditions and should not want to renegotiate unless they find out new information.

In addition to Seller disclosures, the agents have a duty to disclose any known material facts which may affect a buyer's decision to buy. So if you fail to disclose something and you told your agent about a condition they have a duty to disclose that condition, (with few exceptions).

Be sure that you are communicating with your agent on these questions so that they can represent you.
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1 vote Thank Flag Link Tue Apr 24, 2012
Pam:

A Buyer's Agent would not be acting as a fiduciary if they did not encourage a Buyer to perform inspections. Furthermore, a Buyer would be very foolish to not perform their investigative due diligence on the property whether or not they are in an "AS IS" transaction. Both the Listing and Selling Agents must also provide their disclosure findings.

"AS IS" does not release a Seller from disclosing all known material issues. When in doubt about whether a particular issue should be disclosed many times the answer is to disclose to remove post-transactional risk! Most real estate litigation is due to non-disclosure.

-Steve
1 vote Thank Flag Link Tue Apr 24, 2012
Hi Pam,

The buyers can choose whether to order their own inspections or not even though they purchased the property As-Is. They still may want to know any repairs that need to be done with the home before they move forward with the purchase since they know that you, as the seller, won't be fixing any of them. If the buyer does decide to move forward with inspections and discovers much larger repairs than expected, they could decide not to go through with the purchase.

Also, if they do order inspections, you can request for copies of them as a seller.

Hope this helps!
Web Reference: http://www.kendrickkwan.com
1 vote Thank Flag Link Tue Apr 24, 2012
Hi Tony,

Even if you are selling you home as-is, the buyer (by law) has a right to do a complete inspection. You may or may not provide the buyer with the inspection, however, a potential buyer has a right to do the inspection and make the offer contingent. It is upto you to accept or reject the offers. Do discuss in detail with your agent, so that you are properly informed of your duties as a seller. Law requires certain disclosures from the seller. This is a critical topic and must be discussed with your agent.
1 vote Thank Flag Link Tue Apr 24, 2012
There really is no such thing as
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1 vote Thank Flag Link Tue Apr 24, 2012
In short, As-Is means the home is being purchased as they know it to currently be. They still have the right to inspect, and should inspect. When the inspections bring needed repairs, to their attention, then the home is no longer, "As they knew it to be".

At this point, they may ask for repairs. You still have the right to say no, or you can re-negotiate with them. They may also cancel the contract, due to the new information.
1 vote Thank Flag Link Tue Apr 24, 2012
I always recommend that buyers get, at the very least, a home inspection. Most of the time it is more for peace of mind, however every once in a while a problem comes up that the buyer is not comfortable with, and because they had an inspection, the buyers are able to get out of the contact. "As is" means the home is being sold in its present condition, it does not mean that the buyer agrees to buy the home without investigating any potential problems. It does not mean that the buyer has to buy the property no matter what problems it may have. As long as the contingencies have not been removed, the buyer can walk because repairs are needed.
1 vote Thank Flag Link Tue Apr 24, 2012
Buyer should always do their own inspection even though the home is an As-Is condition. As agents, you always want to encourage buyers to do their own inspections so they know what they are getting themselves into. So, I would say "yes" buyers should still get inspections. Hope that helps.
1 vote Thank Flag Link Tue Apr 24, 2012
Hi Pam,

Buyers usually still wish to have an inspection done, so they know what the complete list of issues are.

Kind regards,

Arpad
0 votes Thank Flag Link Tue Dec 8, 2015
Buyer doing home, pest , roof, ect inspections are just as good for the sellers too. Seller don't sue buyers but buyer will sue sellers over anything they feel wasn't disclosed or noticed during a sale. When everything is upfront and out in the open buyers can make a rational decision to move forward or cancel. If you are selling as is and don't want inspections done it really means you are trying to hide something and that is a recipe fro disaster for a seller. Let them get their inspections and feel comfortable with their purchase and save yourself from a future lawsuit.
0 votes Thank Flag Link Mon Dec 7, 2015
As-Is with home inspection is the approach and have the inspection charges paid in ESCROW. The Section ONE issues in the inspection report matters, fix it otherwise leave it there if the cost is minimal. It helps the offer negotiation efforts better for Seller. Sometimes, desperate buyer may give you the offer price having non contingency.
0 votes Thank Flag Link Fri Dec 4, 2015
sell home as is condition
0 votes Thank Flag Link Mon Nov 9, 2015
Actually, the fact that you are selling AS-IS, makes it even MORE important that the potential buyers get thorough inspections. AS-IS is telling the buyer that you are not willing to fix anything. If that is true, then of course the buyers will want to check everything thoroughly before they put their life savings into buying it.
0 votes Thank Flag Link Fri Jan 17, 2014
There is a document called "BINSR" which stands for Buyer inspection notice and sellers response. Buyer has one time to ask for repairs. The inspections and BINSR must be completed within 10 days of contract date. Buyer cannot go back to seller after submitting this doc and say "Oh,, I forgot......". Seller has opportunity to accept or reject requests and cancel or rejects happen at this point.
0 votes Thank Flag Link Fri Jan 17, 2014
Your response is factually incorrect. It may be correct for Arizona (about that, I do not know) but the question was asked in California. Laws, customs, contract forms, markets and expectations are different in different areas.
Flag Fri Jan 17, 2014
I would always recommend my buyers to do a home inspection, hands down!
0 votes Thank Flag Link Fri Jan 17, 2014
As-Is is a bit understated unless buyer pays cash and contract written that nohing has to work, does not matter if infested which would be a health and safety hazard.

The inspection is for the benefit of the buyers to tell them the condition of the house, whether the mechanicals work, if solid structure, condition of roof, etc. so than estimate cost to repair and replace. It is buyers choice. However if government financing those items must comply.

Even though sold "as-is" certain items need to be working - things that make the house livable and safe without hazardous conditions: running water, heating/cooling, range, electricity.
0 votes Thank Flag Link Fri Jan 17, 2014
If you want an AS-IS sale, that's even MORE reason to get inspections ahead of time.

AS-IS means you don't want to pay for every little thing the buyer finds during the escrow process. Back in the early 1990s, buyers would offer a price assuming the house had no defects, but then when the buyer found defects, they would demand the seller fix them. Every couple of days buyers would find something for the seller to fix. That screen is loose... fix it. That faucet leaks ...fix it. This was fun for the buyers, but tough on the seller.

Somewhere along the line, listing agents and sellers both realized "Wouldn't it be better if we just get all the inspections ahead of time and show the buyer everything up front that is broken so the offer price already reflects those things and the buyers don't bug me every other day asking me to fix stuff."

If you were my seller, I would recommend you get inspections ahead of time. Whenever a buyers agent showed interest, I would email the inspections to them, which basically tells them "We are giving you everything we know about this property, so now you should feel comfortable giving us an AS-IS offer. Also, since we are showing you everything, you and I both understand that your offer already takes the condition of the house into consideration. Since we gave you all this information, we don't expect to be spending time throughout this process fixing and/or renegotiating price."
0 votes Thank Flag Link Tue May 8, 2012
Absolutely. The inspection is a right of every home buyer and no agent worth her salt would encourage buyers to avoid an inpsection.

Inspections ARE EVEN MORE NECESSARY in the case of 'as is' sales so the buyers have an accurate sense of whet they are getting into financially.

As a seller, you should allow these inspections. Shoudl you refuse to do so, selling your home will become much more difficult.
0 votes Thank Flag Link Tue May 1, 2012
In addition to what other agents said here, inspection is not a "bad" thing - it is actually protecting you, as the seller, and the buyer. both - because you are giving the buyer a chance to check the property out, and they can't say you were hiding something from them...

Also, there is such a thing as "latent" defects - something that the seller may or may not know about - so it is best to fill out your sellers' disclosures, and give all of the info about the house - and all the problems in the house that you know of.

So, if you ask what's the difference in selling "as is" and selling the regular way?
As pointed below, the difference is that the buyer knows not to negotiate after the inspection.
If the buyer is not happy with the inspection, they can walk away.

Hope this helps,

Irina Karan
Beachfront Realty, Inc.
IrinaKaran@gmail.com
0 votes Thank Flag Link Tue May 1, 2012
Pam, as-is is means only that you are not going to perform any repairs or modifications to the property prior to close of escrow. The buyer has a right to investigate - California is a consumer state. They may or may not decide to perform an inspection. It is a 100% buyers decision and I, if I would be in your place, would never prevent a buyer from bringing any inspector/contractor to see the house.

I will go as far as to suggest you to perform your own inspection prior to putting your home up for sale. It will make your negotiation position much stronger with any potential buyer. On all my listings I have inspections done prior to putting the house on the market.
0 votes Thank Flag Link Sun Apr 29, 2012
You want to sell your house in its current condition. You don’t want to have to repair anything that is broken, worn out, defective, used, bent, leaking, settling, frayed, chipped, scratched, etc. etc. That describes an “as is” sale.
How is a buyer to know what they are buying…and what price to offer? In most cases, inspections that seek to reveal the condition of the house and its systems help to answer those questions.
The seller is also required to disclose any issues the might be of concern to a buyer.
Market forces come into play as to whether you can dictate “as is” sale terms but in most cases a buyer will be willing to pay less for a house that requires repairs before it is truly satisfactory.
0 votes Thank Flag Link Sat Apr 28, 2012
Yes. For a property sold in "as is " condition it is critically important for the buyer. because the seller will not make any repairs it is critically important to get inspections, so that the buyer can get estimates of the cost of repairs and cancel the contract if the expected cost of repairs is more than the amount that the buyer is willing to pay.

Thank you,
Charles Butterfield MBA
Real Estate Broker/REALTOR
American Realty
Cell Phone: (408)509-6218
Fax: (408)269-3597
Email Address: charlesbutterfieldbkr@yahoo.com
DRE#00901872
0 votes Thank Flag Link Tue Apr 24, 2012
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