"As-is" Properties and Home Inspections

Home Inspector with Foundation-2-Rooftop, Inc.

There is a huge misnomer out there that “as-is” properties don’t need to be inspected.  The Seller or bank has placed the property on the market “as-is” claiming they will not perform any further repairs.  That’s great!  But what about protecting the Buyer and making sure they are fully aware of the major issues?   

“As-is” properties scream disrepair.  They should raise huge red-flags to any buyer that there most likely are problems and the seller doesn’t want to deal with them.  Most “as-is” properties on the market being sold by the homeowner or relative find the seller to be in a financial situation where they don’t have any funds available to fix anything.     

“As-is” properties that are foreclosed or bank owned are the latest trend for banks to dump their properties in hopes of avoiding the extra negotiating steps that result when issues are found from a good home inspection.  Because they never lived in the properties, their disclosure statements are “don’t know” all the way down the forms.   Buying a bank owned “as-is” property without a home inspection can be very risky!

For a Buyer, it’s extremely important to know what true condition that “as-is” property is in before proceeding with the purchase.  Buyer’s don’t want to move in and find out they inherited a money pit.  Most people don’t have an extra $3,000 kicking around to pay for the new sewer line that needs to be put in because the existing one is full of tree roots or another $2,500+ to pay for a new furnace because the existing one has a cracked heat exchanger, etc.   

As a Home Inspector, the fact that the property is listed “as-is” doesn’t change the fact that I have to perform a thorough inspection, I have to document all of the issues, and I have to present those findings to the client.  My liability is still on the line whether it’s “as-is” or not.  Usually, “as-is” properties mean the property is in disrepair and it’s going to take me longer to perform the inspection.  There are more issues to document, more time is needed to explain the true condition to the client at the walk-thru, and more follow up calls after the inspection from the agents involved to try to work through the issues.

Another huge misnomer is that “as-is” properties have to be purchased with no repairs at the agreed upon offer.  WRONG!!!  If a home inspection finds $20,000 in problems, the Buyer has a right to cancel the contract.  They can walk away or turn around and submit a new offer to account for those problems.  It’s then up to the listing side to accept or refuse the new offer.  Too often in the Omaha market, I’ve conducted inspections on “as-is” properties and the Buyer’s Agent involved fails to explain this.

I'd love to hear what Active Rain agents have to say about this!

To see lots of photos taken from "as-is" properties, check out our photo galleries at: www.omaha-home-inspection.com


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Indera Coggins
Re/Max 100 - Dunkirk, MD

I totally agree with you. Just because it says "as is" doesn't mean that the sellers get away with it. It is still the sellers responsibility to have the home in good working condition. The banks are bullies when it comes to Foreclsoures and it's a shame buyers are not more informed about their rights.

Oct 19, 2010 02:34 AM #1
Sonja Babic
Sonja Babic/PRIME Realty NC, LLC - New Bern, NC
New Bern NC, PRIME Realty NC, LLC

So true and big part of our job is educating our clients about all the options they have available when making such big decision like buying a real estate property.

Oct 19, 2010 02:36 AM #2
Stephanie Williams, Realtor Murrells Inlet
Seaside Properties - Murrells Inlet, SC

Great post!  I would hope this would be a no-brainer, but you never know.  I think a home inspection is a must regardless.

Oct 19, 2010 02:40 AM #8
Ernie Steele
Berkshire Hathaway HomeServices Homesale Realty - Lebanon, PA
Call me, let's get started!!! 717-273-3774

In my area, most of these properties are being bought by 'flippers'...City row homes being bought cheap to rehab...On the rare occassion it's a real buyer, I've suggested a home inspection before the offer...Enjoy the day.

Oct 19, 2010 02:46 AM #9
Terri Adams-Scott
J. Rockcliff, REALTORS - Walnut Creek, CA
Realtor, Walnut Creek CA Real Estate

I never recommend my sellers to put 'as is' in the MLS or on flyers.  Our California contract already states the property is 'as is' and I believe it puts a negative perception on the seller and home.    

Nothing should ever discourage a buyer from performing all the necessary inspections! 

Oct 19, 2010 02:50 AM #10
Jon Elshaug
Sinacore & Associates - Fallbrook, CA
Independent REALTOR 760.390.8396 - USMC (Ret)

I totally agree, sometimes I find that the buyere has decided if they ask their dream home will disappear.  But once they've been education as to the pit falls and their rights as a buyer they ask.

Oct 19, 2010 02:50 AM #11
Wayne Martin
Wayne M Martin - Chicago, IL
Real Estate Broker - Retired

"As Is" with right to inspect plus a right to walk provision is always best. It gives the buyer an opportunity, at their own expense, to determine the condition of the property. It also provides an opportuity for reassessment of the purchase price if too many items are in disrepair.

Oct 19, 2010 02:59 AM #12
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Greg Wayman

ASHI Certified Inspector - 402-330-1701
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