The Perils Of “As Is” Home Purchase
Nowadays, you might have heard some sellers express their interest in selling a house “as is”. Does one wonder what does it really means to buy a house “as is”? In fact, there are inherent perils to purchasing a house “as is”.
DEFINITION OF “AS IS” IN-HOME SALE CONTRACTS
“As is” means a sale contract does not include any guarantees as to:
- The situation of the house; and
- Promises to repair the house.
This means the purchaser remains liable for any OBVIOUS DEFECTS.
LATENT DEFECTS
Still, the seller is required to provide you with a form that states the hidden defects the seller knows about or should know about. Such problems could be a leaking pipe or water leakage in areas where you cannot see.
If the seller insists on you signing a disclaimer form noting that they have elected not to fill out the disclosure form, WALK AWAY from the deal. If you sign the deal with the disclaimer, you have unwisely forfeited important protection.
SOME SAFEGUARDS
- ASK YOUR AGENT AND SELLER ABOUT “AS IS”: You should prudently ask your agent and the seller about the reason for selling the house “as is“. Maybe the reason has to do with their marital and financial situation other than a very dilapidated place. The reason might be the seller simply does not have money and they are afraid of litigation.
- ASK FOR MOLD, TERMITE AND GENERAL HOME INSPECTION: This is very important you make the deal contingent on mold, termite, and general home inspections. If problems arise, make sure, you ask for reasonable repair costs. Recently, in light of Hurricane Katrina, many insurance companies would not sell you insurance if you have mold in your house.
- ASK FOR A SMALL SUM FOR SMALL ISSUES: You should ask for $1,000 or so if a small problem is found in the inspection.
