Basically, the seller is stating that the price has been adjusted to the current condition and that no further repairs will be done by the seller. The buyer, however sitll has the right to inspect the property and if not satisfied may exit the purchase contract. AS-IS does not mean the buyer cannot ask for a concession in negotiating the price or after the inspection. The seller can agree or not.
Feel free to look at the "Buyer Advisory" published by the state of Arizona at http://www.arizonahomesland.com/forbuyersorrenters.html
May I wish you the best.
Jeff Masich, Realtor
Arizona Homes and Land
As was stated earlier, in-spite of the "As-Is" requirement of a bank seller, Bank Owners may make exceptions upon occasion and agree to pay for a fix if the repair makes the difference between the home being habitable and not, so that the house can qualify for certain types of loans. Explore these issues and the options with an experienced agent when preparing your initial offer and when a problem is found during the inspection period to see how a counter offer can be crafted.
The buyer and seller can always negotiate exceptions to the addendum, such as providing certain repairs. Even bank-owned sellers may make repairs in limited cases even though they specify as-is in their contracts.