I’m sure that as you have been browsing the internet for homes you have seen some that state that it is being sold “as-is”. So… what does that mean? Does it automatically mean that the home is a dump? Is it even worth taking the time out of your day to go see it?
There is no consistency between homes that are being sold “as-is”. Some of them are actually a great deal! Look for ones that are in a great neighborhood, with easy fixes. Others my be a bigger problem with larger ticket repairs that can cost you more in the long run.
If you do decide to put in an offer on a home that is being sold “as-is” it’s important that you know how to protect yourself. Here is what I go over with my clients first:
Understand What “As Is” Means
A home that is being sold “as-is” just means that the seller will not be making any repairs. The seller is looking for an easy transaction that closes on time, so they have probably cut the list price to reflect that.
Though “as-is” homes aren’t always in disrepair, most do need repairs, and the sellers know that. This can mean a bargain for contractors who can correct these problems, or you if you are up for the challenge!
Seller’s Property Condition Disclosure
Utah requires sellers to disclose any defects that they know about in order for a home to sale. Typically we will get this disclosure right after we go under contract. It is important to get any disclosures in writing and review them with me or your realtor to protect you in the long run from fraudulent information. Something important to note: while sellers legally have to disclose EVERYTHING they know about, you can never be sure that they aren’t either lying or really just don’t know about them. Make sure to have a licensed inspector do a deep-dive on the property so that you have a full picture of what you are getting into.
Take cautious steps if the seller does not live in the home.
If the property was owned by someone who didn’t live in the home recently—whether it was a landlord who had been renting out the property, a child of a deceased parent, or even a bank in a foreclosure sale, they can’t disclose something they didn’t know about. If this is that case, be sure to be extra cautious and thorough during your due-diligence.
Make sure you get a qualified inspector. If you did not waive you due-diligence contingency (which I never recommend doing) you are given a period of time to do a deep dive on the property and to get the house inspected.
The results of this inspection will paint you a pretty acurate picture of the property. You will know if there is any major repairs that need to be made… such as if it has a leaky roof, water damage, or serious foundation issues. The results from this will help you decide if it is in your best interest to move forward with the transaction or not.
Figure out how much repairs will cost you
As a result of the inspection you may have uncovered some repairs that need to be made. We will now go around to contractors and get bids on the necessary repairs. This will help you to know what it will cost you to repair everything as well as help with negotiating. We may be able to get the sellers to come down in the purchase price if the cost for repairs are substantial.
Deal or no deal?
As long as you do you due-diligence and truly vet the property, an “as-is” home could be a great deal for you and your budget. My biggest tip is to hire a professional inspector so that you can truly understand what you are getting yourself into if it is a home that needs a lot of work. Make sure that you have the budget, patience and time to take on the repairs that it may require.
Don’t forget, just because you are under contract doesn’t mean you have to go through with it. That’s the beauty of the due-diligence contingency… you can get out of the contract and in most cases get your earnest money back. If you’re not comfortable, don’t hesitate to walk away.
I hope that you have enjoyed my series about How to Find the Perfect Home for You and Your Budget series. We have learned so much about:
- As well as this one… “As-Is” Home… Deal or No Deal?
I’m so glad that you’ve tagged along!
If you are thinking about buying a home in Utah, even a year or two from now, I’d love to help you find the perfect home for you and your budget.
Email me at firstname.lastname@example.org and let’s see what’s possible and how close we can get you to your own perfect home sweet home.
I'm McCall Carter and I love helping first time home buyers make their first home more affordable and I love helping sellers looking to move up to their forever home. Let me know how I can help you make your real estate dreams come true.
2901 Ashton Blvd. #102
Lehi, UT 84043
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