Buying a Home As Is

Buying a home as is or seeing a sale labeled “being sold as is” can strike fear into any homebuyer. In reality, buying as is happens all the time, and it’s not something to fear. Although the information here will be geared toward real estate in California, you may find much of the article relevant to other states as well. When shopping for a home, buyers sometimes find properties being marketed “as is.” Or, their agent might relay to them that the sale is as is. But what does as is truly mean when buying a home as is?

buying a home as is

First a quick disclaimer: Although I am a real estate agent in San Diego, California, I am NOT an attorney, nor am I qualified to provide legal advice. The information here is intended to explain how as is terminology is used in a typical real estate transaction. Please rely on your own real estate professional and/or legal counsel to advise you on your own particular circumstances, and in your own state or region. If you are not lucky enough to be shopping for a home in San Diego, California, as is may have very different implications for buyers in other states or countries.

What Many Home Buyers Assume As Is Means

Most home buyers assume as is terms noted in the sales description mean there are terrible things wrong with the home. They often also think that it means the sellers are hiding or not disclosing those terrible things. While as is does not mean that there are NOT terrible things, they are not much more likely than in a regular residential sale here in California.

Putting as is in the home description or agent remarks also does not mean the seller can sell the home without disclosing known issues. Sellers in California are required to disclose all known material facts – in other words, any information that might impact whether or not a buyer will want to buy the home, or that could influence what they might pay for it. Saying as is does not mean the seller gets out of disclosure laws.

an as is sale
Sometimes buyers picture this scenario for buying a home as is – but that assumption is often inaccurate.

What Sales are As Is?

The residential purchase agreement in California by default stipulates that the purchase is as is. As a result, it might appear redundant to say as is in the home description or negotiations. It being in the residential purchase agreement simply means that the buyer is not obligated to do any repairs or provide a credit in lieu of repairs. This typically comes up when a buyer has completed their home inspection and would normally request the seller do specific repairs, provide a credit in lieu of repairs, or some combination of the two. This is handled in a process called the Request for Repairs.

Requesting that a seller address newly discovered items is fairly common practice here, even though the contract defaults to as is. However, when a seller states that a sale is as in via the listing description, agent remarks, or even in a counter offer, they are putting the buyer on notice that they don’t intend to provide ANY concessions related to the condition of the property. Buying a home as is means buyers should go into the contract with the assumption of NO seller concessions.

If a home is not labeled as an as is sale and a home buyer makes reasonable requests of the seller via a request for repair, sellers will often agree to some or all of the requests. If it’s a hot seller’s market, sellers will be less inclined to agree to concessions. If it’s a hot buyer’s market, buyers have more leverage, and sellers are more likely to agree to those requests. If the sale is as is though, the seller is advising buyers up front they don’t intend to do any repairs or provide any credits.

When Do You Usually See As Is Homes Listed

Trust Sales Related to an Estate

Homes held in a trust are nothing unusual in California. A trust is a very common way to hold title and is often done so heirs can avoid having to go through probate. When a home is held in a trust and part of an estate (eg. the owner has passed away), the trustees will often stipulate the sale is as is.

One reason for this is that heirs or trustees frequently have limited or no firsthand knowledge of the condition of the home and any potential issues. This is one common instance where there may be a higher likelihood of surprises revealed in a home inspection. Trustees will typically want to avoid dealing with requests for repairs when they are relatively uninformed about a home’s potential issues. They may also want to avoid buyers who might seek to abuse the request for repair process (more on that below).

Buying a Home As Is in a Hot Seller’s Market

Sellers in a hot seller’s market might have multiple buyers lined up and eager to buy their homes. These sellers will have very little motivation to do repairs or provide any credits. These sellers may also wish to avoid buyers that get an acceptance and then attempt to renegotiate their purchase price in the request for repairs process. For these reasons, sellers in a hot market may prefer to market their homes as is.

Whenever a Seller Feels Like It

Any seller, regardless of market conditions, property condition, or the vesting of the property, can stipulate their sale to be as is. Someone selling a brand new home may simply want to avoid the hassle of the request for repair process knowing the home is in great condition. Another seller selling a fixer property may know there is a ton of work to do and simply expects that to be the responsibility of the buyer once they purchase. You can find as is sales in a variety of circumstances and it is rarely an indicator of anything nefarious.

Do Some As Is Sales Still Wind Up Providing Concessions?

Unfortunately, some buyers abuse the request for repair process and ask for astronomical concessions. I have seen buyers acting in bad faith exaggerating concerns revealed in a home inspection and then attempting to renegotiate a purchase. Buyers taking this approach might even ask for these concessions on a sale that was noted to be as is. Selling a home as is reduces the likelihood of this scenario, but it doesn’t guarantee it won’t happen.

There are also certain situations where major, unknown issues come up in inspections on an as is sale where the seller might revise their position. For example, let’s imagine a buyer doing inspections on an as is sale who then discovers a major foundation issue. In that type of scenario, an as is seller might decide providing some concessions to keep that buyer is a better option than trying to go back on the market with a major foundation issue disclosure.

As Is Home Sales – Conclusion

As long as you are going into a purchase aware and with prudent contingencies in place, buying a home as is should not deter a pragmatic and cautious buyer. One general suggestion when buying a home as is would be to assume you will be paying for some repairs after closing. This sometimes means adjusting your offer price lower to account for some likely repairs the seller won’t remedy. In other cases, it is simply adjusting your expectations that items discovered in your inspection(s) will wind up being your responsibility rather than the seller taking any responsibility for them.

As a quick reminder – none of the information presented here should be construed as legal advice. Please consult with an experienced agent in your local market and potentially with a legal professional to make sure your interests are protected in the context of your circumstances, the property in question, laws pertaining to your area, etc.

If you or someone you know might be buying or selling real estate in San Diego, regardless of location or price point, please let me know. I can also assist in connecting buyers and sellers outside San Diego with outstanding Sotheby’s International Realty agents via our 1000+ offices in over 80 countries. Please read my client reviews, and don’t hesitate to call, text, or email me with any real estate questions or to schedule a no-obligation consultation.

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About Marc Lyman

Marc Lyman gets results and his proven track record and client reviews leave little doubt. Marc grew up in Silicon Valley and graduated from UC San Diego in 1995 with a BA in Political Science and a minor in Psychology. Marc is known for his exemplary marketing, uncompromising ethics, and professionalism. His proactive approach helps ensure smooth transactions, with your interests always first and foremost. Marc's tenacious attitude, strong background in deal-making, and seasoned negotiation skills are tempered with a strategic, personable, and diplomatic approach. Contact Marc to facilitate your real estate success!