Sellers list their homes for sale as-is when they don't want to do any repairs before closing. It means that there are no guarantees from the seller that everything is in good condition and that they are not required to provide a Seller Disclosure. The “as is” condition may mean that the landlord does not have the time or money to make repairs, or in the case of a foreclosure or sale of property, the seller may not be familiar with the condition of the home. Whatever the reason, if you are interested in the property, the only way to know the true condition is to do a home inspection.
Consider including a contingency clause in your offer based on your satisfaction with the inspection. If a deficiency is discovered with a budget-breaking repair cost during the inspection, you'll want the option to retire without penalty. The advantage of an as-is sale is that the purchase price can be comparatively lower than that of similar properties in the neighborhood. But be sure to factor in the cost of repairs and renovations when you factor in the total cost of the purchase.
Buying as is isn't for everyone. If you plan to ask the landlord to fix a defect or aren't willing to follow up on the purchase if the inspector finds something wrong, it's probably best to avoid bidding on an as-is property. Sellers can even make certain corrections requested by homebuyers, if that's the only way they can sell the home. Unless it's a popular real estate sales market and other potential buyers compete with you, the realtor knows that the property won't sell until you get an offer that works for you.
If prospective buyers are contractors or skilled with a hammer, are looking for a property to sell, or maybe just want an extreme bargain, the promise of an as-is sale could be music to their ears. The buyer, not the seller, pays for inspections, which makes sense, because that way the inspector doesn't work for the seller. Therefore, the effect of an “as is” provision for the sale of real property is that the buyer accepts the property in the condition that is visible or observable by him. When performing a home inspection, the home inspection contingency allows the buyer to withdraw from the sale if repairing the property is too costly.
But what does an as-is home sale mean for buyers? When searching through property listings and the term “as is” appears, some people see it as a warning. Other sellers simply sell as-is because they need to sell quickly; they can't afford or don't want to make the necessary repairs; or they simply know that there are enough desperate buyers willing to take the risks. Technically, when a real estate agent publishes a sale as-is, it means that the homeowner is selling the home in its current state and will not make repairs or improvements prior to the sale (nor will he negotiate with the buyer any credits to finance these repairs). While sellers of homes as they are have already made it clear that they will not lift a finger on that front, an inspection remains an important purpose for buyers before the sale.