With all the properties being marketed “AS IS” I would like to shed some light on “AS IS”. The fact is, all properties are sold “as is” in Georgia. The simplest way to state the transaction is “Buyer Beware”. That may sound cold but that is the reality. When the closing occurs the property belongs to the purchaser with all benefits and faults. The purchaser has little if no recourse against the seller.
What is an “AS IS” Home?
So why does the seller feel the need to convey in the marketing and additional amendments “AS IS”? There are two main reasons.
1. The seller wants it clearly stated so that there is no implied warranty.
2. The seller is selling what is there presently and will make no improvements. If the seller makes an improvement then a warranty of some kind could be implied. Example: If I fixed your roof today and it started leaking tomorrow wouldn’t you feel that I should come back and fix the roof again?
What are the problems with an “AS IS” Home?
A problem that comes out of the “AS IS” sale generally has to do with lending issues. Keep in mind the seller is selling what is presently there. If the Appraiser goes out to the property and states on the appraisal that items XY&Z need to be repaired or replaced the lender is going to expect XY&Z to be repaired or replaced prior to closing. Depending on what type of loan, this could be a deal killer.
It is extremely important to keep everything in perspective. Too often when stress levels are high, people find fault in the process. You hear comments like…The Lender should…The appraiser should…No one will want to buy that property until it’s fixed. Perspective…if the property is being sold at tens of thousands of dollars below the true value then a one thousand dollar repair should be expected.
All property in Georgia is sold “AS-IS”…Purchasers should thoroughly inspect the property so that they will be as informed as possible regarding the condition of the property.
I find that as is / where is tends to be my buyers strongest tool when making offers on foreclosed properties around metro Atlanta. Missing condensers can be an issue but price solves most problems.
Thanks for your positive attitude Jeff. The agents that are proving to be successful are the one that are taking an approach like you are…When given lemons …make lemonade!!!
Just because the property is being sold “AS IS” doesn’t mean that we can’t ask for something in special stipulations. Over the summer I assisted a client that bought an as is property and we negotiated the new heat and air conditioning system into the transaction.
The seller may not want to warranty the home but they certainly don’t mind allowing an outside vendor to warranty their work.
I have found that bank asset managers will push for the seller to agree for some repairs to be made if they know the home will not pass FHA appraisal without those repairs. I recently had plumbing and HVAC repairs made by the seller on an “as is” home, and I also had a new thermostat replaced in another one. It never hurts to ask!
Thanks for your input Dori. Like you stated it never hurts to ask. What’s the worst they can say, no, then your back where you started.