In today’s depressed housing market, opportunities to purchase a home sold in “as-is” condition are numerous as sellers find themselves increasingly in “distressed” situations. Although asking prices may appear extremely attractive, you, the buyer need to be prepared to do a lot of background work before actually making and accepting a purchase offer. Experts advise that the purchase of an “as-is” home certainly has its good and bad sides. Incidently, "as-is" means that you would agree to buy a home without any repairs being done by the seller before you get the home.
The pro side typically means getting a better price, some real estate agents advise. The con side is that you may not know what you are actually getting yourself into. You might end up saving as much as $20,000 off the asking price and end up with $50,000 in repairs, thereby negating your savings. You should take a good look at the home at the initial showing and assess how it was taken care of, or abused if that is the case. Cosmetic defects may be OK with you as they are generally easily corrected. Only thru a home inspection by a certified professional can you detect more serious structural issues. So it is a good idea to always get a home inspection, even if you are buying a home from a friend or relative.
There are numerous reasons a seller would want to sell the property “as-is”. Some of these reasons include: they do not have the money to make the repairs, they do not want to spend time and money to do the needed repairs, or, they expect that you will prefer to design the makeover to match your own tastes.
Inspections To Consider Before I Make An Offer On A Home
- Have a pest or termite inspection and a general home inspection performed by licensed/certified personnel. Have additional items checked such as pools, spas, or any other areas not generally covered during the general inspection.
- If the inspections indicate that problems exist, seek out professionals like roofers, plumbers, electricians, AC technicians, etc., who can further inspect the problem area and recommend required repairs, including cost.
- Get at least 2 bids for needed repairs from licensed professionals, or contractors, to best establish the cost of such repairs. An experienced realtor will advise their client if the deal is really that good, based on the cost of the needed repairs versus the value for the neighborhood area. This is the critical part of the “as-is” purchase process.
- You need to be sure that you have the funds to perform the needed repairs, and make sure that you ask a lot of questions beyond the required disclosures.
- You should also confirm remaining warranties on major appliances and systems such as AC, roof, water heater, etc. You also need to be aware that even if the seller agrees to throw in a new home warranty plan, pre-existing conditions will not be covered which means fixing pre-existing problems will be your responsibility if you buy the home.
In summary, opportunities do exist in today’s declining housing market to get a great deal to purchase a home in “as-is” condition. Often you can get a home at prices well below others in the neighborhood. When shopping for the right deal, make sure the sales price, minus the costs to restore the home to satisfactory condition, will still result in a good value to you. Make sure you do your due diligence, including thorough home and pest inspections using certified inspectors, followed up by multiple bids from licensed contractors to ensure favorable financial end results.
Article by GetPreQualified.com editorial staff. This Article is designed to be of general interest and should not be considered legal advice. The specific information discussed may not apply to you. Before acting on any matter contained herein, you should consult with your personal legal adviser.
