What Does 'As Is' Mean in a Real Estate Transaction?

Real Estate Agent with John Aaroe Group - Broker Associate/EcoBroker Certified

I am continuously asked what the clause 'as is' means in a real estate transaction, and it's easy to see why.  A number of the available inventory in Downtown LA is comprised of bank-owned properties, or short sales, and when regular sellers need to compete with bank-owned and short sale properties, sometimes those sellers ask buyers to take the property 'as is' as well.

So back to the question at hand -- what does 'as is' mean?  It means the seller is selling the property in as is condition without doing any repairs, or crediting the buyer for any issues that may come up during the physical inspection period.  The seller won't pay to repair that leaky faucet, you'll have to take it 'as is.'  The seller's not going to replace that one outlet by the sink that today's code is saying needs to be a GFCI, nope.  Basically, the seller's doing nada. Zip. Zilch. Nothing.

What are your options when purchasing a property that is being sold 'as is?'  Well first of all, make sure you do as many inspections as necessary to ensure you feel aware of the potential problems a property may have.  I've had buyers skip sewer inspections to find out later there was a $5,000 plumbing blockage -- that also required them to break up their living room because the house was on a slab.  Oy. 

Say you got your inspections done and found there was indeed a plumbing issue.  Now it's up to you to decide whether or not you can live with this issue or not.  Is it a big deal to you?  If it is, walk away.  If it's not and it's something you don't mind doing, then at least you're aware of what issues already exist and perhaps an idea of what the repair cost will be.

Regardless of what you decide to do, it's important to understand that the seller is not obligated to do anything when they're selling the property in 'as is' condition.  Hopefully the seller is motivated too and wants to get the deal closed, but with this clause being seen more often in Downtown, it's something to be aware of.


Caroline Choi Real Estate
Caroline Sells The City LA


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Michael L. Brownstead
Keller Williams Realty - Allen, TX

Carline, awesome posting with great points....the seller is not obligated to fix anything. Thanks again!

Aug 31, 2011 11:57 PM #1
James Loftis
Real Estate 911 Inc - West Palm Beach, FL
Real Estate 911 Inc


  Good points, I would also mention that the contact should state  that the owner does have the right to inspect

and can cancel the contact if  buyer finds issues with the property that they do not want to contend with.

Sep 01, 2011 12:23 AM #2
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Caroline Choi

Caroline Sells The City -- Los Angeles
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