Technically, when a real estate agent lists an as is home sale, it means the homeowner is selling the home in its current condition, and will make no repairs or improvements before the sale (or negotiate with the buyer for any credits to fund these fix-its). The term “as is” is rarely tacked on a property sales listing that’s perfect and move-in ready.On the contrary, people often sell as-is homes that are in disrepair, because the homeowners or other sellers can’t afford to fix these flaws before selling (which would help them sell the home for a higher price).Alternatively, a home may have been through foreclosure and is now owned by a bank, or the seller may have died and left the house to inheritors or an estate agent who have little idea what could be wrong with it but need to sell.Whatever the reason, the current sellers aren’t willing to pretty up a home before selling it. They just want to sell the real estate and move on. All of this means that the buyer of this house inherits any problems a home may have, too.When a real estate agent lists as home to sell “as is,” that doesn’t change the legal rights of the buyer. The listing agent must still have the seller disclose known problems, and the buyer can still negotiate an offer with the final sale, contingent upon a real estate inspection.
Pros and cons of as-is home sales
So how can “as is” be the aforementioned opportunity, if the buyer is taking on all those problems?
It all comes down to cash value. Those two short words in a listing usually indicate that the home may be considered to be a fixer-upper. The house will have a relatively low list price to start with, and the sellers might even entertain still lower offers.
A real estate agent may even list a house with serious problems as “cash offers only,” if the house’s problems could prevent it from qualifying for a mortgage.
If the prospective buyers happen to be contractors or handy with a hammer, are looking for a property to flip, or maybe just want an extreme bargain, the promise of an as-is sale could be music to their ears.
Cash buyers and corporate investors look for home sellers who want a fast sale, but they expect those sellers to offer a low list price in exchange.
Yet the downsides of an as-is property are obvious and should not be underestimated. Any number of things could be wrong with the house that are not immediately apparent to the eye. Buyers might think they’re getting a killer deal, but they could also be throwing their life savings into a black hole.
