What is wrong with the property that for it to be sold "As Is"?

Asked by Cocoa, San Marcos, TX Mon Jan 25, 2010

This question is about this property: http://www.trulia.com/property/1083698952-7827-Sarepto-San-A…

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Dawn Kraemer, , 78258
Mon Jan 25, 2010
Hi Cocoa,
When a property is being sold "as is", it means that whatever is found to be defective with the home will not be repaired, replaced or otherwise adjusted in any way by the seller. It doesn't necessarily mean that the property is defective. More importantly, it means that a buyer cannot use a lender and in most cases must have cash to purchase. This is because, lenders will not lend money on an unhabitable property, so when a buyer makes an offer on a particular property, the lender of their choosing will not approve the loan until the inspection is done and repairs are made to the lender's specifications.

This property must be in need of repairs because the listing agent indicated that the property would not qualify for FHA, VA or conventional financing. Therefore the listing agent has determined that there are defects to the home that will not pass an inspection. The listing agent is not required or in any way obligated to indicate what the defect is because real estate agents are not inspectors.

The listing has only one rather bad photo of the garage. The townhome is behind the garage but we still cannot tell what is defective with the property without going out to see it. You will have to contact the listing agent or a realtor of your choice to go and see the property to determine if it's the right home for you.

Something important to remember is that when a lender seizes a property, the lender is not required by law to provide a Seller's Disclosure as is required in a sale from an owner/occupant, because the bank never lived in the home and and can't possibly know what is defective without an official inspection. Since the lender is loosing money already on the sale, they will not plunk down any more money to have it inspected and repaired. Therefore, buyer beware!

Once an offer is made on a property being sold "as is", the buyer has the right to pay for an inspection, but if the buyer backs out of the sale because of too many defects, they will most likely lose their earnest money deposit.

If you know anyone who intends to buy a distressed property, it's a good idea to work with a Realtor, who can guide them through the entire process and watch out for their best interests.

I hope this has helped!

Dawn Kraemer
Keller Williams Legacy
(210) 232-5053
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