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...
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Ben Giordano, MBA, MILHM, CDPE, REOS, Realtor® - Tel: (561) 929-9955
Waterfront Specialist with Realty Associates
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