During your most recent home search you may have happened upon the phrase “as is” in the home listing. Homes that are sold with the phrase “as is” may have a myriad of meanings. In this article, we will explore the meaning of the phrase “as is” in real estate listings.
What Does Sold ‘As-Is’ Mean?
In simple terms, an “as is” property is one in which the home is being sold without any promises of making repairs or concessions by the seller. The seller may be aware that the home may need updating or repairs, and they are saying that the home is priced according to the condition of the property. In some instances, this is basically a way for the seller to say “I am not entertaining seller concessions” or “I know the home may need updating or repairs but I am not going (or am unable) to make concessions” towards the repair of the property.
A seller may sell a home “as is” because they may have bought the home as an investment property or inherited the property. They may not have lived in the property and feel as though they do not know enough about a property to satisfactorily complete a seller’s disclosure.
What is an “As Is” sale in Georgia?
This generally means that the seller is selling the property without any warranties to buyers. This means that the seller is selling the property in the current condition. The buyer is agreeing that they had an opportunity to carry out their due diligence on the property (by having their inspections done and the relevant code inquiries) to make sure that a property meets their expected use standards.
What Sold “As Is” Does NOT Mean?
Sold “As Is” does not protect a seller from latent (or hidden defects) that a seller would have had knowledge about and are trying to exclude themselves from taking responsibility for those repairs, or disclosures. If a seller knows about hidden defects that would not be detectable by an average home inspection, it is the seller’s responsibility to disclose those defects.
It is important for buyers to take precautions when purchasing real estate, particularly buyers who are not handy. As a general rule, buyers should exercise Caveat Emptor (Buyer Beware) when it comes to real estate transactions. Caveat emptor is a Latin phrase that means “let the buyer beware” when translated to English.
The caveat emptor concept states that it is the buyer’s responsibility to conduct the necessary due diligence (research/ home inspections) before making a home purchase to make sure a home is in good condition and meets his or her demands. If the purchaser does not take the required steps, in the event that the purchased item has material defect, the purchaser will not be entitled to any remedies for discovered damages after a transaction closes.
In a seller’s market, some homebuyers feel an obligation to forgo home inspections and due diligence in an effort to make their home purchase offer more competitive. This has caused some homebuyers to book a home inspector on the day they view a property that they are interested in purchasing.
Should You Buy an “As-Is” Home?
Many first time homebuyers may feel anxious when they see a property that is listed as “sold as is”. Do not let that deter you from purchasing a home. There are many ways to protect yourself when buying a home, even homes that are listed for sale “as is”. The primary way to protect yourself is by carrying out a home inspection and other relevant due diligence checks when purchasing a home.
One thing that many homeowners overlook when purchasing a home is overlooking the power of speaking to neighbors. It is always a good idea to meet the neighbors who have a good eye shot of your front yard and your backyard. They may be able to tell you about the history of a home that you may not have known otherwise.
Which Types of Homes are Sold ‘As-Is’?
Homes sold “as-is” may need work. The amount of work needed may vary from one property to another. If the property is unlivable, this may prevent a property from being eligible for some types of financing such as FHA and VA government insured financing. If the property is really in a bad state, you may have to pay cash or get the backing of a hard money lender to acquire the property, as it may not qualify for other types of financing, even a conventional loan.