For recent sales in the area, how many of the homes are as-is sales?

Asked by BusyHomeBuyer, 95035 Fri Dec 14, 2012

Should I consider purchasing a home as-is in this market? I have less than 8% to put down and do not have a lot of buying power. How many percentage of homes these days are as-is sales in the 350k-450k market (not considering investor purchases)? What would be your advice?

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12
The Medford…, Agent, Fremont, CA
Sat Dec 15, 2012
Normally in as “AS-IS” sale, you retain the full right to inspect AND you still have your contingency removal intact should you find anything you cannot live with. You just cannot ask for repairs. It’s a “take it or leave it” scenario.

If they are indeed actually asking you to remove your inspection contingency up front – don’t do it UNLESS they have provided you with a comprehensive batch of current reports and all their disclosures in advance for you to carefully review before signing the counter. Otherwise, it is VERY risky otherwise.
1 vote
Meena Gujral, Agent, Pleasanton, CA
Tue Nov 19, 2013
Our CAR contract has the 'AS Is Clause" built into it. It basically means that you understand that the seller will not be fixing or correcting any items that may come up on your inspection report. But you still have the right to get any and all inspections on the property. If there are things that need to be fixed, you can still ask the seller to fix them. If the seller refuses, you have the right to back out and get your deposit back as long as this is all within the contingency period which is usually 17 days unless you made it less time in the contract.

Hope this helps. I am sure your agent can help clarify further if you have more questions on the "AS IS" Clause in the contract.

Meena Gujral
510-279-9580
http://www.helpusellachievers.com
0 votes
Philip Cabral, Agent, San Jose, CA
Sun Dec 16, 2012
As-is purchases are very common. In fact, I honestly don't remember buying or selling any of my homes without an as-is.

If you are furnished with all the disclosures, either through your own by way of an inspection contingency or through the seller, then my advice is that you have everything you need to make an educated purchase.

I would not advice that you sign an as-is if the seller has not furnished you with all the necessary disclosures or that you intend not to order inspection reports by way of an inspection contingency in your offer.
0 votes
John Juarez, Agent, Fremont, CA
Sat Dec 15, 2012
I hope that you have a Realtor representing you because if you are relying on the free advice that you are receiving on this forum you are putting your transaction and your deposit in jeopardy. Frankly, if you do not have professional help or you are relying on the seller’s agent for your advice you are making a mistake.

For instance, where do you get the idea that you give up your inspection contingencies if you agree to buy the house “as is”? That is not correct. Inspection rights are subject to a separate contingency. By agreeing to buy “as is” you are not giving up any rights or contingencies. What you are giving up is the expectation that the seller will be willing to fix anything in the house that is in disrepair.

This is the kind of information that you should be receiving from YOUR Realtor.
0 votes
BusyHomeBuyer, Home Buyer, 95035
Sat Dec 15, 2012
Thanks for all your answers!

My true situation was that I put in an offer and was countered with an as-is condition. So, in that case my understanding is that I would not have any inspection contingencies if I accepted the counter.
0 votes
I agree with Pacita! What does your Realtor® say (I hope it's not the Listing Agent)? Also, be aware (Para 10B(ii) of the CAR purchase agreement requires the Buyer to supply copies of all investigative reports obtained by Buyer!
Flag Sat Dec 15, 2012
You can still have your inspections done...and yes, you can still set a time frame. What the sellers are telling you is that they won't agree to any repairs. But if the repairs are so severe and are safety hazards, the sellers may relent. Or you can walk away. The thing is, once you do inspections, they become part of the disclosures which will have to be provided to the next prospective buyers who may have the same concerns as you do, and this may hurt the chances of the property getting sold. What does your realtor tell you?
Flag Sat Dec 15, 2012
The Medford…, Agent, Fremont, CA
Sat Dec 15, 2012
If, as you stated, you have a chance to buy a home “AS-IS” … yet you only have a limited amount to put down – then consider yourself in the fortunate few. Most buyers with limited resources are getting blown out of the water these days.

MANY sales are currently going “AS-IS” – although the California Purchase Agreement (as stated by John) already is an “AS-IS” agreement unless repairs are specifically requested – many offers today have the additional verbiage written in (typically on page 4) stating “Property to be purchased AS-IS”. This is the buyer’s way of stating that they will not exercise the option provided for in the contract to ask for repairs of any kind. If, after performing your inspections, you find that there are issues you cannot live with, then, as long as your contingencies have not been removed, you can back out and get your deposit back. The only cost to you will have been the inspections.

As stated by Pacita, there is no way to really know what the actual percentage of homes is that are selling “AS-IS” … if it’s a short sale or REO then we know for sure – however, for the rest of the sales, it’s not a fact that’s disclosed on the MLS (Multiple Listing Service). From personal experience, however, I CAN tell you that the percentage is VERY high in the current market – and we have a very large volume of sales with which to track the data.
0 votes
Pacita Dimac…, Agent, Oakland, CA
Sat Dec 15, 2012
Our California Association of Realtors contract is always AS IS -- UNLESS there are requests for repairs and credits to which both parties agree. There is no way of knowing how many are AS IS without knowing the details of the contracts of sold properties.

Considering that we are encountering multiple offers, often at over list price, it is almost safe to assume that the sellers are in the driver's seat and may have negotiated no repairs or credits...and if they agreed to such, it may be for sales at higher than list price.

If you aren't using a realtor, that's the first advice I would give you. Have someone guide you on how to make your offer strong. Here's a start:

What sellers look for in a strong offer http://activerain.com/blogsview/1687013/what-do-sellers-look…

Bear in mind that for short sales and REO (foreclosures) the strategy may be different.

For short sales, try this http://activerain.com/blogsview/3283123/how-can-buyer-write-…

For foreclosure, consider this http://activerain.com/blogsview/2417132/how-to-write-a-good-…

Good luck
0 votes
John Juarez, Agent, Fremont, CA
Fri Dec 14, 2012
The standard California purchase agreement states: “Unless otherwise agreed: the Property is sold (a) in its PRESENT physical (”as-is”) condition as of the date of Acceptance and (b) subject to Buyer’s investigation rights…”

The agreement also states: “Buyer has the right to inspect the Property and, … based upon information discovered in those inspections: (i) cancel this Agreement; or (ii) request that Seller make Repairs or take other action.”

There is much more to the contact and I hope you realize that … means that there is an omission in the quoted material.

The point is that – sorry Laura Coffey – there is a thing such as “as is” in California and properties are sold “as is” very often. Short sales and REO properties are almost all sold “as is” because the short sale lender and REO seller are losing lots of money on the sale and is not interested in spending more to improve the house for the buyer. The short sale seller is losing their house and is in no position to make repairs.

In the heated, competitive market in which we find ourselves at this time – and I am very well versed in the local Fremont market – “as is” sales are also very common for “normal sales” or equity sales which are neither short sale or REO sales. Why? Because repairs cost money and the seller is in a position to refuse a request for repairs when receiving multiple offers for more than the asking price on their house. If the buyer is not willing to buy “as is”, the seller can merely take the next buyer in line.

In any event, whether it is an REO sale, short sale or equity sale, the buyer still has the right to inspect the property. If upon finding issues that are too difficult for the buyer to handle, the buyer’s option is to cancel the purchase and move on.

Can a buyer ask for a seller to make repairs? Yes. Of, course. Will a seller agree? Well, if the seller is offering the property “as is”, the answer if often: NO.
0 votes
Laura Coffey, Agent, Santa Clarita, CA
Fri Dec 14, 2012
There is no such thing "as is" in California unless you completely remove your inspection contingency up front but you can still back out by giving paragraph 14 as your reason in the CAR purchase agreement.
Just because sellers say the house is "as is" doesn't mean you don't have a right to do a home inspection and back out if you find something and the sellers won't fix it.
Even if you agree to "as is" you still have a right to ask for items fixed, they can say no, and you can still back out and get your deposit if you follow the contract and its timeframes.
You need an aggressive agent who knows contracts well and can get the job done is this tough market.
Web Reference:  http://www.LauraCoffey.com
0 votes
Prasad Bodas, Agent, Newark, CA
Fri Dec 14, 2012
Hello BusyHomeBuyer,

You could consider buying home with AS-IS due to following reasons :

1) Sellers proposal, i.e. sellers is not willing to make any repairs
2) Competition for that home i.e. anticipated buyers are more
3) You prefer to buy home AS-IS.

When you consider to buy home AS-IS, you still can get home inspected through various inspectors for your knowledge. It just that either seller will not pay for repairs or you are ready to buy AS-IS.

"Re.percentage of homes these are sold AS-IS" - it all depends on local market, demand, home sale is fair market value or distressed sale and buyer and sellers preferences.

Hope this helps you in some fashion.
0 votes
BusyHomeBuyer, Home Buyer, 95035
Fri Dec 14, 2012
Ok. I guess I should mention that I'm presented with an opportunity to buy a home as is but I'm not sure if I should consider it or move on. If a majority of the homes right now are selling as-is I might consider. Just need some thoughts and advice.
0 votes
Ken Vasan, Agent, Fremonet, CA
Fri Dec 14, 2012
The offer that you present itself is an AS IS offer. Meaning, what you see is what you get. However, this does not include major issues that are unearthed during inspection process and you have every right to renegotiate on the price or back out if you have not removed the contingencies. When some listing agent explicitly puts "Buyer to take property AS IS" means they are trying to emphasize that seller will not fix any small issues.
0 votes
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