When perusing through property listings, you may see the term “as-is”. So, you may wonder, what does the term “as-is” mean? It means the owner is selling the home in its current condition, and will make NO repairs or improvements or give the buyer any credits to fund these fix-its. “As-is” homes are often in disrepair, because the sellers can’t afford to fix these problems. Or, the seller died and left the house to inheritors who have little idea what could be wrong with it. Whatever the reason, the current sellers aren’t going to fix up the place before they sell it. They just want to cash in on the sale and move on. Regardless the term can be a warning to stay away or an invitation for opportunity.
It all comes down to more bang for your buck. Typically an “as-is” property will have a lower price to start with and there may be room for the sellers to consider even lower offers.
Cons of ‘as is’ homes - The downsides of an “as is” property are obvious and should not be underestimated. Any number of things could be wrong with the house that are not immediately apparent to the eye. You might think you’re getting a killer deal, but you could also be throwing your life savings into a scary pit. Around every corner may lurk a disaster and a goblin you weren’t expecting.
Pros of ‘as is’ homes - If you are a contractor or just handy with a hammer, if you are looking for a home to flip, or maybe just looking for an extreme bargain, “as is” could be music to your ears. Projects you are willing and able to do yourself increase the value of your investment.
Know what ghosts you are buying - Since they can be bargains, they are worth considering, although there’s one precaution you’ll definitely want to take: a home inspection. A home inspector examines the house from basement to rafters and will point out any problems plaguing the place—both current or potentially in your future, such as an old roof or outdated plumbing. You should always elect to do a home inspection, especially on a property where no one knew how the home was cared for and no one knows what happened right before the past owners left the property.
While “as-is” sellers have already made it clear they won’t lift a finger on that front, a home inspection still serves an important purpose for buyers. Once you’ve made an offer on a home that’s been accepted and have put down a deposit, you should arrange to have the property inspected from top to bottom. You will want the home inspection contingency written into your contract, so that if the inspector unearths problems that are overwhelming, you can walk away from the deal with your deposit in hand.
A home inspection costs vary by area but usually well under a $1000. Without exception, the cost of the home inspection is well worth it considering the headache you would have had in the future trying to make the house livable.