An "As-Is" Contract does not mean what most people think...

By
Real Estate Agent with RE/MAX Sun & Sea

Many buyers and sellers tend to take the name of this contract too literally... So let's clarify the single item that makes all the difference between a typical contract and an "as-is" contract:

"The buyers have the right to cancel for any reason (at their sole discretion) based on the inspections results, and the sellers are not obligated to pay for any repairs"

Let's look at the three common misconceptions:

1- "The property is sold as-is, buyers assume all risks and conditions hidden or obvious." Wrong: by law the sellers are still required to disclose to buyers any repairs, mold, and other conditions that may negatively impact value as shown in the sellers' disclosures. The seller's property disclosure is still a required document to be properly filled out and signed by sellers and provided to buyers for their review. Any agent omitting this step or filling-out this form on behalf of sellers is opening himself/herself to litigation and disciplinary action.

2- "The seller is not obligated to pay for any repairs." Well, legally that may be correct, but for all practical purposes in this buyer's market sellers would be foolish not to take care of or credit buyers for some repairs to salvage the sale. This is especially true if the seller's disclosure indicates certain items as being functional and the buyer's inspector shows otherwise... Here, lack of flexibility from the sellers may be interpreted as bad faith by the buyers, who now will worry about what else the sellers are hiding from them.

3- "It is sold as-is, the sellers have no obligation to repair or maintain". Wrong, the sellers have the obligation to deliver the property to buyers at closing in the same condition it was in at the time it went under contract. This is not a parked car sold as is. If there are existing or new issues that if not addressed will cause more or new damage, then the sellers need to address them or lose the sale. Typical examples include water leaks, A/C stops working, an appliance gets damaged, a roof leak develops, wood destroying organisms appear... Agents involved better have some pictures documenting condition at time the property went under contract as well as the inspector's report. Why not bring your camera at the inspection and take pictures of everything since you are going to be there anyway...

I hope this sheds some light on the "As-Is" mystery...

Visit www.EliteWaterfront.com for current Waterfront homes and condos Sales and Listings.
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Ben Giordano, MBA, MILHM, CDPE, REOS, Realtor® - Tel: (561) 929-9955
Waterfront Specialist with Realty Associates

Ocean, Intracoastal, and Canal Homes and Condos in the Following Coastal Cities:
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Posted by

Ben Giordano, MBA, MILHM, CDPE, REOS, Realtor

Waterfront Specialist. Visit our website for our unique coastal waterfront market statistics, listings, and sales information.

www.EliteWaterfront.com

Selling the Best Waterfront Homes and Condos from Palm Beach to South Beach

Ocean, Intracoastal, and Canal Homes and Condos in the Following Coastal Cities: Palm Beach, Manalapan, Delray Beach, Highland Beach, Boca Raton, Deerfield Beach, Lighthouse Point, Hillsboro Beach, Pompano Beach, Lauderdale by the Sea, Fort Lauderdale, Hollywood, Hallandale Beach, Golden Beach, Sunny Isles Beach, Bal Harbour, Surfside, Miami Beach, and South Beach.

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Rainmaker
571,362
Bill Gillhespy
16 Sunview Blvd - Fort Myers Beach, FL
Fort Myers Beach Realtor, Fort Myers Beach Agent - Homes & Condos

Hi Ben,  Excellent review of this ofter abused contract.  Certain rights and obligations survive this contract.

Nov 04, 2009 07:13 AM #1
Rainer
41,727
Tammi Copsey
Perry Hall, MD

Great information and I thank you for posting it!  I think many folks are uninformed when it comes to "as is" and this is simply a great explanation!

Nov 04, 2009 07:26 AM #2
Rainmaker
223,173
Brian Brumpton
Keller Williams Boise - Boise, ID
Boise Idaho Real Estate

Ben,

Nice clarification of the finer points.  Number 3 especially.

Nov 04, 2009 08:49 AM #3
Anonymous
Ivis Elassal
AC unit stolen before closing, what I can do? I'm buying a short sale property, I just discovered the AC unit was stolen. my Realtor told me ""there is nothing that can be done. The house is being sold "as is"""" When I put the offer on the house the AC was there, was part of the contract. I'm shocked my Realtor response, I understood that SELLER shall maintain the PROPERTY in the same condition as on the date of the acceptance of the Purchase Agreement. What are my choices??? I think we should submit a Amendment to Agreement requesting a cash credit at closing, for the cost of replace the missing AC unit, and give the option to replace it. But I want make sure the wording will in a way to allow me the option to still go forward with the purchase. Any advice? Thanks Ivis PS. this is a short sale, I'm waiting for the short sale approval.
Feb 19, 2010 01:46 PM #4
Anonymous
Anonymous

As-is contract short sale. Seller refuses to sign property disclosure because it is an investment apartment. Seller never lived there. Buyer already did the inspection and sign an approval. Now buyer want the formal disclosure. Is the realtor held accountable? Seller refuses to give disclosure.

Mar 02, 2010 03:16 AM #5
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