What Does ‘Sold As-Is’ Mean?
Sellers list their homes for sale as-is when they don’t want to do any repairs before closing. It means there are no guarantees from the seller that everything’s in working condition, and they’re not required to provide a Seller’s Disclosure. If you buy an “as-is” home and later find major problems, you’re responsible for the repairs.
“As-is” sellers still need to meet federal and state minimum disclosure standards, which include telling you about conditions like lead paint.
“As-is” doesn’t always mean broken beyond repair. There are many reasons why a seller might list a home as-is even with minor or no issues. The seller may be in debt and not have the money to pay for home renovations. The seller might not have time to wait for contractors to finish a major job. There are also plenty of non-repair-related reasons why a seller might list a home as-is.
Home Inspections Are A Must For ‘As-Is’ Sales
If you want to buy an “as-is” home, you’ll definitely want to get a home inspection. A home inspector will let you know all the major issues. This gives you a good idea of what you’ll need to fix and how much it’ll cost if you decide to buy the home.
A home inspection is different from an appraisal and is typically not a required part of the mortgage process. Inspectors are there to look for major issues. Appraisers are there to assess the value of the property. Your mortgage lender will probably require an appraisal, but the home inspection will be an optional part of the buying transaction.
If a seller refuses to allow a home inspection for an as-is property, it probably means one of two things:
- The seller knows there’s something seriously wrong with the home and they’re hiding it from you.
- The seller has a hunch that there’s something wrong with the home, and they don’t want to confirm something that lowers their property value.
Either way, a seller refusing to allow an inspection is your cue to ask questions or get away from the sale as fast as possible.
Know The Cost Of Repairs Before You Buy
Once you have the results of the home inspection, it’s smart to sit down and get an accurate idea of what it would cost to make any necessary repairs to the home. Separate the repairs into “must do” and “can wait” lists and then get quotes from different contractors so you have an accurate idea of the scope of the work that will need to be done after the sale is final.
The Whole Home May Not Be Sold As-Is
“As-is” doesn’t always mean that the entire home is being sold in its current condition. Sometimes, a seller lists a property as-is but only for a specific part of the home. Some common elements that a homeowner may list as-is include fireplaces, sheds and garages, broken appliances and pools.
Ask the seller exactly what “as-is” means with their home. If only certain features are for sale as-is, you may be able to negotiate repair requests on other parts of the home. How much the seller is willing to negotiate with you may depend on other offers they’re received.
Should You Buy A ‘Sold As-Is’ House?
So, is buying an “as-is” home really worth it? Before you decide if you should buy an as-is house, ask yourself a few questions:
- Do I have money to make repairs?
- Am I prepared to deal with major structural or system damage?
- Do I have a place to stay if the home is uninhabitable?
- Do I have money for an inspection and an appraisal?
- Do I have a trusted real estate agent who has experience with “as-is” sales?
- Am I buying this home not as a first property, but as a second home or an investment?
If you answered “yes” to all of these questions, an “as-is” home might be right for you. Make sure you consult a financial advisor or real estate professional before moving forward.
The Bottom Line: Is Buying A House ‘As-Is’ Right For You?
Sellers list their homes for sale “as-is” when they don’t want to do any repairs before closing. “As-is” properties may seem like a bargain, but the truth is that most contain hidden issues that can cost new owners thousands in repairs.
If you think an “as-is” home might be right for you, knowledge is power. Take plenty of time to schedule expert inspections and understand the real condition of the home before you decide to buy.
Hanna Kielar is a Section Editor for Rocket Auto℠, RocketHQ℠, and Rocket Loans® with a focus on personal finance, automotive, and personal loans. She has a B.A. in Professional Writing from Michigan State University.