What Does “As Is” Mean in Today’s Mission Viejo Real Estate Market?
“As Is” Do’s and Don’ts
In a real estate market with more distressed properties than we’ve seen in a generation or more, there’s a term being used which has some subtle implications – Home Sold “As Is.” In today’s Orange County Real Estate market, this means different things to different people. To one recent home buyer, this meant “Why pay for a home inspection if the seller is not going to fix anything anyway?” Same buyer later found some huge, costly repairs were necessary. After he had already bought the home. I kid you not. Oops. So, I always figure if there’s one guy out there with that kind of mindset, there’s bound to be another. This is for all of you who still have the chance to avoid this kind of boo boo.
First of all, the California contract we all use to buy and sell houses in Orange County clearly states that homes are sold in the current As Is condition. It actually uses those words. In the first line of paragraph 9 of the RPA if you want to be precise. And it’s got quotation marks and parenthesis’ and it’s in bold font. So essentially EVERY home on the market today is being sold As Is. Why do some sellers have to be redundant? Well, evidently they need to make a BIG DEAL about it. Up front.
For Orange County Home Buyers
Don’t ever not do a home inspection. Error on the side of caution. Figure the $250 – $500 cost of a thorough home inspection is a cheap insurance policy. Goodness, no one would buy a horse without a vet check (think that’s where the catchy verb “vetting” something came from?) Know what you’re getting into and the risks that might involved. And the cost to fix it. Get some estimates of what it would take to do the repairs. Your Realtor should have a contractor to refer you to for a quick, but well informed, estimate. And then don’t be afraid to go back and ask the seller for some help. You can do one of three things with armed with your inspection report and your cost estimates:
1. Ask the seller to fix the things you’re most concerned about.
2. Ask the seller for a credit back so you have enough money to take care of it after escrow closes and you’re the new owner.
3. Ask for a lower price on the home. Essentially renegotiate the purchase price based on the new information.
Even if it says As Is. You have the right to ask. And then based on their response, decide what you want to do. Heck, $500 bucks to walk away from a huge cost to repair – money well spent in my book. You’ve seen the “Money Pit,” right? OMG – Netflix it tonight if you haven’t.
For Orange County Home Sellers
This means just because you reiterated that it’s As Is, it doesn’t mean Don’t Ask. The buyer might still come back to the bargaining table. With some ammo. Maybe things you weren’t even aware of as issues. Be prepared. Be ready for the buyer to walk away. And if you are working with your bank on a Short Sale, it’s not out of the range of possibilities that the bank will take the problems into the equation as well. Just don’t ever turn down a back up offer. If you’re an equity seller, you’re an even bigger target for buyer requests. And realize that once you know about the things that are broken, health and safety issues, or hazards – you have an obligation to disclose them to the next buyer if you can’t work it out with the one you’ve got in hand. What’s that old saying? A bird in the hand is worth two in the bush. But hey, that’s up to you.
I’m Leslie. Just keeping it real in Orange County Real Estate. 949-678-3373