How "As Is" is it?

By
Real Estate Agent with Utah Homes 9334967-SA00

I was showing pre-foreclosure property to a client recently when she asked a very good question, "how as-is is it?"

"Sale Avenue" by The Truth About...When one purchases a resale home, one has the opportunity to request repairs and see if the seller is willing to make them. Bank-owned properties are somewhat different in this regard. Though it's possible to ask for repairs, it's unlikely that such requests will be granted.

Most properties that have been foreclosed upon are sold "as is". That means the buyer will be purchasing the home without a guarantee that the property will be improved beyond the state it is currently in. In some cases, the property could undergo further damage.

Depending upon state law, the buyer will most likely be allowed an inspection period. Though each contract is different, Arizona buyers may typically cancel a purchase if they discover that the property has issues larger than meets the eye. We know such things by hiring a licensed inspector who is able to provide details regarding the property's condition.

There are many pre-forclosures and bank owned property on the market these days. I've noticed that it has become easier to find property that is in surprisingly good condition. Times like these allow people to purchase far more "home for that money" than in previous years.

All who purchase such homes should take into account a few things before purchasing:

  • What repairs will the property need?
  • What will the repairs cost?
  • What's the price difference between the repaired home and other homes currently on the market?

Sometimes the buyer discovers that the "deal" requires more time and effort than other nearby homes that are in better condition. A good real estate agent and home inspector will be able to assist you in this decision making process.

photo credit: "Sale Avenue" by The Truth About...

Comments (9)

Liz Moras Migic
Chilliwack, BC
Chilliwack, British Columbia - Realtor

Had to read that 'how as is is it' line a few time before I got it - especially since it was hyphenated! Butl.......a good question.........We don't have short sales here - but its interesting to read about the process and the expectations ...:-)

Nov 08, 2008 02:56 AM
Chuck Willman UtahHomes.me
Utah Homes - Alpine, UT
Utah Homes

Liz- No short sales in Canada? I didn't know that. What's the alternative? I'm curious since I very often ask myself if there isn't a better way to do this.

Nov 08, 2008 03:05 AM
John Walters
Frank Rubi Real Estate - Slidell, LA
Licensed in Louisiana

Chuck most of the time the utilities are disconnected and it makes it even harder to inspect these properties.

Nov 08, 2008 05:46 AM
Lee & Pamela St. Peter
Berkshire Hathaway HomeServices YSU Realty: (919) 645-2522 - Raleigh, NC
Making Connections to Success in Real Estate

Hey Chuck - very catchy title!  I too had to read it a couple times until in seeped in...  as a Raleigh REO agent here Lee's the first to tell potential buyers when one of our listings is being sold as is.  I

t means that the seller will NOT handle any of the repairs however the buyer does have an opportunity to have the home inspected and IF they find something major - or more than they want to deal with - they can walk away and retain their earnest monies.  So I guess to answer the question how as is is it?  Here in the Raleigh area at least it's all as is!

Your Raleigh Realtors

Nov 08, 2008 06:46 AM
Debbie Summers
Charles Rutenberg Realty - New Smyrna Beach, FL

Chuck... As - Is is always a topic of conversation...  Often times as-is offers aren't as as is-as you would think. 

Nov 08, 2008 07:27 AM
Kate Elim
Dockside Realty - Spotsylvania, VA
Realtor 540-226-1964, Selling Homes & Land a

Hi Chuck...With many more as-is properties on the market across the country, this is a great post.  Sometimes people have an "unrealistic" idea of what the repairs will cost and the amount of hard work it might take.

Home inspections are extremely important even if the are for informational purposes only.

Kate

Nov 08, 2008 03:41 PM
Susie Blackmon
Ocala, FL
Ocala, Horses, Western Wear, Horse Farms, Marketing

Hi Chuck, wish you had been here in Orlando.  It was fun and inspiring and a real treat to meet virtual friends in person.

Nov 08, 2008 10:00 PM
Chuck Willman UtahHomes.me
Utah Homes - Alpine, UT
Utah Homes

John- So true... it can be a gamble... that's why I like to show the alternatives. After all, the buyer is making a large purchase and these homes require quite a bit of due diligence.

Pamela- It's almost always 100% as-is. Though I have seen the rare concession, the seller will almost never make home improvements on a foreclosed home.

Debbie- Have you noticed how often the home actually is in worse shape than the day you made the offer? That's the other knock against purchasing bank-owned property.

Kate-I've seen people spend more money on improvements than they would have spent purchasing a new home of the same floor plan with a complete warranty.

Susie- That would be very cool. I've met a handful of bloggers and it has been quite the enjoyable experience getting to know them better. It's  been quite fun.

Nov 09, 2008 10:19 AM
Pam Dent
Gayle Harvey Real Estate, Inc. - Charlottesville, VA
REALTORĀ® - Charlottesville Virginia Homes / Horse

Chuck yoou make good points.  Sometimes due to the condition of the property that good deal really isn't such a good deal.  It is important to know just what you are getting into.

Nov 15, 2008 01:35 PM