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Just because a home is being sold "as is" -- which is often the case with many foreclosures and short sales since the banks don't want to spend any more money on them -- doesn't mean that you don't need a home inspection on the home.
The bank does not send anyone out to inspect the property, so any damage noted by the bank is simply going to be that which is obvious, and you can see that same damage when you walk through the house. It's the more subtle damage, the more subtle wear and tear, the hidden things that you need to know about, and that's where your home inspector comes in.
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17 Comments on Do I need a home inspection if it's being sold "as is"?
I would never sell a home without an inspection. The $200-$300 for a home inspection is money well-spent.
Jim
I agree completely
I am involved in buying bank owned properties
There is no better way to find out what additional work a house will need, than to have an inspection.
then we have our trades people come in and give us bids on the work found by the inspector
Jeffrey
You are right again Jim - the home inspection is required for almost every sale....good observation, though...
As-Is is a little misleading. There are a couple of ways to get banks to fix things that are wrong with a property.
1. If a buyer is getting an FHA or VA loan that the seller has agreed to via seller signed exhibit, the seller will make any repairs that are required by the lender to meet FHA and VA requirements.
2. Amendment to Address concerns. If there are items that come up in the inspection report or via buyer inspection, you can address these items in an amendment in one of two ways, asking the seller to repair or replace items (bids attached), or ask the seller to reduce the price of property to a particular amount. Adding a stipulation that if seller does not agree with said amendment, the agreement is void.
Never be afraid to ask the seller for items that are important to the well functioning of the home, ie replace missing compressor and ensure in good working order at time of closing. Same goes for plumbing, hot water heater, heating system, or a structural defect.
The neither the seller or listing agent has lived in the property. Besides an initial inspection, the listing agent has not spent a lot of time at the property.
I recommend that all buyers get a home inspection, no matter what type of property they are buying, unless they have the ability to inspect the home themselves.
Kat Vallish
Keller Williams Realty Traditions
South Metro Atlanta
Jim,
Great post. As-is is becoming quite common here in NC. My advice to my clients....we still need to know what "AS-IS" is! I think before long everything will be "AS IS".
Jim, while I agree with you inspection is needed for As-is, I also believe we should never sell an As-is property. It is not that difficult to find out all the problems. Why just list all the problems and have an honest listing in stead of listing. But most realtors have been getting used to As Is listings.
You're right, a home inspection is a must when buying any home. There can be many "hidden" problems in a home that looks cosmetically good. Hiring a qualified home inspector can help find those hidden problems before a buyer commits to the purchase.
Jim, inspecting bank owned properties for investors is the bulk of my work. From short (major system) surveys to full inspections anyone skipping this step in the purchase of a property is being foolish.
All homes in our area are sold "as is".
When a buyer clients offers to purchase a home I recommend a home inspection to find out what the "as is" condition truly is.
Hi Jim:
I always recommend a buyer getting a home inspection. They need to know what they're getting into!
I have seen that some Realtors selling foreclosures are having them inspected prior to submitting an offer. This is a risk because they may not get the home but if the client is truly interested in purchasing they will be so informed on the front end of negotiations. Some lenders will not honor discussion on repairs that were unknown after the contract has be accepted and the buyer is left to decide weather to purchase or not because of the impact on the pocketbook. Great reminder and as always, a wonderful informative post. Thanks Jim!
Jim, very important points. Also, homes were in seemingly "good" condition when they were occupied can develop all kinds of problems after they have been standing vacant for a period of time. Saving on the home inspection is saving at the wrong end in my opinion.
"Saving $300-$500 by refusing an inspection is being penny wise and pound foolish. Buyers should always have an inspection so they know what they are buying.
Even seasoned veterans obtain inspections, it can be costly if you dont ! Have a great and successful week
You are right Jim. A home inspection is important. At least this way, the buyer knows what they are getting.
I always tell people that a home inspection is the most important insurance policy they will buy when purchasing a home. If you own a car and can't pay the payments are you going to get an oil change?
Now what about a house where you can't pay the payments? Are you going to repair the small leak in the roof or under the sink?
You want to know if "as is" is at least good enough for you. Do the inspection!!