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As a seller, you may not have the resources to completely renovate your home, or even make minor repairs, before listing. As a buyer, you may be looking for a property to flip or you may be willing to purchase a property with flaws at a lower price. For listings that need work, the agent typically characterizes them as ‘fixer-uppers’. On the buying side, a buyer may agree to accept the home in ‘as-is’ condition as a means of getting the home at the lowest possible price. Some homes are in such deteriorated condition they will require an ‘as-is’ contract. For a purchaser to consider an ‘as-is’ purchase, that person will need to have ample liquid assets to purchase the property and make repairs; or must have the ability to obtain specialty financing.
In short, a property listed as “As-Is” means what you see is what you get. Basically, the seller intends to sell the property in the condition in which it’s listed and does not plan to make repairs or other improvements, not even as part of final negotiations. The buyer can retain the rights to have inspections performed and may retain the right to terminate the contract if the inspections provide evidence of more serious problems than are visible during the buyer’s tour.
From a legal standpoint, it also waives any responsibility on the part of the seller for the home’s condition. While some buyers may purchase an ‘as-is ‘property without inspections, once the closing takes place the seller has no further obligations with regards to the condition of the property. Sellers and purchasers may be well advised to consult their real estate attorney to fully understand the risks associated with purchasing a property ‘as is’.
Buying a home is an exciting prospect. Getting a home at an optimally low price can make the purchase even more attractive! While browsing for a place to call your own, you may find several “As-Is” properties that need a little extra love and attention. A common misconception about homes like these is that they’re in a state of disrepair. In some cases, this might be true. In some cases, the condition may require only a cosmetic updating rather than serious structural defects or ‘big ticket’ repairs. An experienced REALTOR® will be able to help you determine if a property is worth examining or if it's one you should pass on. There are both benefits and pitfalls to consider when buying a property ‘as-is’. As indicated above, buying a property ‘as-is’ may complicate the financing process and may even make it impossible to finance.
Should you choose to purchase an ‘As-Is’ property, here are a few important things to keep in mind.
There are a variety of reasons you, as the seller, may choose to list your property ‘As-Is’. This can include circumstances like:
If you choose to sell a property ‘as- is’, and if you occupy or have occupied the home recently, you are still required to provide a property condition disclosure which will reveal any and all defects about which you are aware. You should also expect to sell the property at a significantly lower price than if it were ‘move-in ready’. Selling ‘as-is’ may mean a value reduction of 20% to 50% depending on the condition.
Marx-Bensdorf has years of experience and knowledgeable agents that can help you make the best decisions when purchasing or selling an ‘As-Is’ property. Our expertise in the Greater Memphis area real estate market gives us unique and competitive insight to help you buy and sell with confidence.
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