Business & Real Estate

On the Market: What does ‘as is’ really mean when buying or selling a home?

I frequently hear the term “as is” when buyers and sellers are talking about a real estate transaction. What does it mean? Sellers often say things like: “I don’t want to have to fix anything, so I want to sell my house as is.” Buyers think the house they are purchasing won’t have any problems because everything has been fixed when they don’t buy it as is.

Q: What does “as is” mean?
A: It means the seller is not obligated to provide the house in full working order. In other words, the condition that a house is in when the contract is written is the condition it needs to be in when you take ownership of the house. If there is no as-is clause, there are certain things a seller must do to the house before it transfers to the buyer.

Q: What sort of things need to be fixed for a sale that is not as is?
A: It depends on how the contract is written, but typically a seller would need to resolve items called out in the pest inspection, replace broken windows or skylights, repair any broken appliances, address any major safety issues, etc.

Q: How do I know if I am buying a house as is or not?
A: As-is clauses are either included or excluded in a purchase contract written by a buyer. The seller needs to agree to it, so it is a point of negotiation.

Q: What are the advantages and disadvantages to a buyer of purchasing an as-is house?
A: The advantages are that a seller might perceive your offer as being more attractive in that they w Clean Cacheould not be required to do any work to a house they are getting ready to move out of. You also might have other projects and upgrades you’d like to do and you can control that entire process, including quality, cost, etc. The disadvantage is that you may have to invest some time and money fixing things after you move in.

Q: What are the advantages and disadvantages to a seller of accepting an as-is offer?
A: Typically a lot less work is involved, especially in older houses. Be sure to disclose everything you know about the house, from what you have fixed (ever) to what you could fix and what maintenance might be required. The better informed you make a potential buyer about the house, the less likely you are to encounter buyer disappointment – or lawsuits – after the sale closes.

Q: My house is old, so I want to sell it as is. Can I make this happen?
A: Maybe. You can tell potential buyers that you want an as-is sale, but they are the ones bringing you the money, so it becomes a point of negotiation. A buyer may not be willing to give you as much money for an as-is house.

Q: Aren’t most houses around here sold as is?
A: Yes! The vast majority of houses are sold as is. Just remember that as a seller, your disclosure obligations are high and you should take them very seriously. Your agent will advise you.

Q: Regardless of whether it’s an as-is sale or not, shouldn’t I expect everything in the new house that I just bought to work like a charm?
A: No! Imagine buying a 5-year-old Lexus, a 10-year-old Chevy, a 20-year-old Chrysler or a 40-year-old Volkswagen. They will all require maintenance and something will inevitably go wrong the day after you drive off the lot. The same thing happens with houses.

Owen Halliday is a longtime Los Altos resident and realtor who manages the Sereno Group office downtown. Email comments, questions and potential column topics to This email address is being protected from spambots. You need JavaScript enabled to view it. call 492-0062.

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