Buying an “as Is” Home; What to Expect
Filed Under Real Estate | Posted on February 7, 2010
Many property buyers are weary of the term "as is" home because they don't know what to expect. An "as is" home simply means that you are buying a property with no warranties. So after the purchase has been made, if you find something wrong with the house, for instance if you need to undertake major renovation work to fix a faulty plumbing system or a leaky roof; the expenditure will have to be incurred by you and not the seller. So does this mean that you are getting a raw deal when buying an "as is" home and that the seller can simply cheat you by making temporary repairs that hide the major faults? Not really, given below is information about the legal requirements from the buyer's and the seller's side while selling/buying an "as is" home
Even though the term "as is" home has slightly different definitions in various states there are certain right that the buyer has. For instance in the state of Georgia this would mean that the seller does not have to make any warranties or disclosures to the buyer. On the other hand in the state of California a seller would have to disclose any potential problems or issues to the buyer.
Buyer Rights
Regardless of the state you are in; as the buyer you have absolute right to get the house inspected by a professional home inspector to find out about any problems that will help you to make an educated decision whether to purchase the home. Once the faults have been determined (and these can include structural anomalies, plumbing and/ or electrical problems, damage to woodwork from termites and other organisms, mold, lead based paint hazards) and the buyer gets a report and if he still chooses to go ahead with the purchase he cannot claim any liability from the seller for any such defect.
What does the Purchase and Sale Agreement state?
The purchase and sale agreement gives the buyer and/or his representatives the right to enter and inspect the property at the buyer's expense at reasonable times. As a buyer you should not only inspect the various amenities and features of the home but also the neighborhood so that you don't regret your purchase later.
Even though you can carry out the inspection on your own it is highly recommended that you avail the services of a professional home inspector who will examine every aspect of the property and give you a detailed report. Although this may cost you a few hundred dollars it will certainly be better than purchasing a money pit.
Sellers Duty
Particularly in the state of California under section 1102 of the California Civil Code, the seller is obligated to provide the buyer with a detailed real estate transfer disclosure statement and once such a statement has been provided the buyer cannot claim any liability for the damages listed in the report .On the other hand if an item has not been listed and if a defect is observed before or after the closing of the sale the seller will be liable to settle any claims associated with the repair of such defects.
So it is possible to buy as an "as is" home without any risks provided you are willing to put in some money and time into getting a proper inspection done.
About the Author: Mike Taylor is the broker / owner of Red Door Real Estate which focuses on Indianapolis real estate as well as Fishers real estate.
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