So many areas around the Country are experiencing strong sellers markets. This is great news for home owners but it leaves many prospective home buyers struggling to find a home. We’ve all heard the stories about buyers that have submitted a number of full price offers on homes but continue to lose out. Frustration from this sort experience can lead buyer to try desperate measures.
One of the most alarming trends we have seen is home buyers buying properties in “As Is” condition. This isn’t new but there is a desparate new twist that makes the practice dangerous. Traditionally “As Is” simply means the buyer can do an inspection but will not ask for any items to be addressed. We have begun to see homebuyers foregoing the inspection altogether. Their rationale is that since they aren’t going to ask for anything, they would rather just save the money on the inspection.
What makes this dangerous is that the inspection gives them an opportunity to discover facts about the home that might be what we call “Deal Killers”. These would be items not disclosed on the seller's property disclosure either because they didn’t know or they didn’t want to disclose, either way, these types of deal killers can be very expensive to fix. These can be things like foundation problems, asbestos in homes which requires abatement, failing septic systems and broken sewer lines just to name a few.
The $300 to $400 a homebuyer will spend on a home inspection is a small price to pay in order to avoid a repair that could ultimately cost tens of thousands of dollars down the road.
It’s important for home buyers to remember that buying a property “As Is” doesn’t mean they have to give up their rights to inspect the property, it just means they agree not to ask the seller to make any repairs in the event they do find anything on the inspection.
If problems are found the buyer can still get out of the contract while retaining their earnest money. The buyer would just cancel the contract based on property condition. Having said this, we would certainly advise making the seller aware of any hazardous conditions.. If they don’t know it’s the ethical thing to do and they may be willing to make repairs or concessions. If they knew and didn’t disclose, notice may encourage them to disclose to the next buyer moving forward.
So by all means make that “As Is” offer but don’t waive the inspection itself. Find out what you’re buying and don’t get stuck with the repair bill. Remember, at some point you will most likely sell the property. If the market has changed to a buyers market when that time comes you may be left writing a big check for costly repairs. The price tag on these types of major repairs can gobble up a lot of your equity.