What do you do when you have found the perfect house but it needs a little work and has the words “as is” staring you in the face? Many buyers are left with questions they want answers to regarding those two words. What if the home inspection comes back with electrical issues or termites? Just how permanent are the words “as is”?
The words “as is” has been best defined in most states as an “as disclosed” condition. There are standards for the “as is” status meaning if the seller has not disclosed they have termites, they must indeed disclose that information. Any material information that would have an affect on your decision making should be disclosed. However, in other states “as is” there is no disclosure requirement on the sellers part so do your research on which category your state may fall into.
In most cases buyers are able to place a contingency in the “as is” contract. A home inspection is the key to knowing if you “as is” buy is the way to go. This is the only true way to know what exactly is going on with your potential property in every area and to get bids on repair costs if anything does happen to show up in the inspection. Having the “as is” contingency gives the opportunity for the buyer to safely back out of the contract without losing their deposit as long as they have exercised their rights to this contingency within the allotted time frame.
Some buyers who learn of termites or electrical issues do still decide to move forward with their purchase but will make a request that the seller make some repairs or a price reduction be made. In some cases, buyers will threaten to back out of the sale if repairs by the seller are refused and will still request their deposit back.
Legally a buyer is able to back out of a contract after the time period expires on their contingency but they must expect to in turn lose their deposit. Again, this is in most but not all states.
It is best to contact an experienced agent or broker with detailed questions to choose the best route for your needs.
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