This house looks pretty promising for me and Mrs. Homie. However, like a lot of other houses in our price range, this one comes with the warning “House is being sold ‘as is.’” I know that realtors tend to use their share of euphemisms, so I’m tempted to conclude that this is doublespeak for “It’s a dump.” Then again it could just be legal boilerplate to indicate that no warranty is expressed or implied.
What’s the straight dope?
You need to check with a real estate broker (or better yet, an attorney) in your area. Every area has it’s own practices and customs.
In my area, the practice is that the buyer hires somebody to inspect the house and is free to renegotiate the deal if the inspection discloses problems. Once the deal is done, the seller is on the hook only if he or she has actively concealed a problem. In my area, people don’t say “as is” in advertisements because everyone knows that caveat emptor applies.
And by the way, just about every house more than 20 years old has problems. And probably a lot of newer houses do too. If you are just starting house hunting, I would advise you to worry most about problems that are difficult to fix, e.g. structural problems. Learn how to spot sagging floors, damaged joists and other structural elements. Steer clear of those houses.
On the other hand, a lot of problems can be fixed without spending a lot of money. If you buy a house with problems of a more cosmetic nature, you can often demand a big discount and save a lot of money. When the time comes, hire a good inspector and don’t necessarily run if the house has some problems.
Around here “as is” usually means that the owner doesn’t want spend any money to fix or improve the house to suit the buyer. There is a house in my neighborhood being sold as is. It’s a great house but it’s worn out the last two owners with on-going renovation. The current owner just wants to take his money and turn it over to someone else.
Almost two years ago I sold a house in Chicago “as is”. It was structurally sound, but I didn’t want to bother spending the time and money to fix it up to impress a prospective buyer. The asking price reflected that, and it sold within two months with only a little negotiating. I did fill out a form attesting that to the best of my knowledge there were no problems with the plumbing, electrical, etc. and that I had recently had the house inspected and treated for termites.
As I was told would most likely happen, it was bought by someone who flipped it and resold it a year later.
Make sure you read the disclosure statement fully before you make an offer, and then have a thorough inspection by someone good. As the others have said, it could just mean the owners don’t want to pour money into it to get it ready for sale. But you never know.
It’s not uncommon for a purchase contract for a house to include a clause that essentially says “I’m going to have some people look at it, and if they find any deficiencies you will correct them, up to a cost of some fixed amount.” When I bought my house it was a maximum of $1,500, and I got a new built-in microwave because the door handle on the old one was broken (I hadn’t noticed this during my first walk through). Also some flashing needed to be replaced, and two GFCIs weren’t tripping properly. A home sold on an as-is basis would not include any such language in the purchase contract.
As mentioned, the seller’s disclosure statement is very important. It’s one thing for me to sell you a house in as-is condition, and another thing to willfully avoid telling you of known deficiencies.
You should also check to see if the county/township/borough/city in which the house is located has any specific conditions which must be met prior to going to settlement. The seller can say as-is all day long, but if regulations require certain things being addressed, you won’t get through settlement successfully until L&I blesses the place.
Good luck.
Note that a disclosure statement is a matter of state or local law. In New York, sellers must provide a property disclosure statement for ordinary residential real estate sales (not coops or condos), but a seller can elect to give the buyer a $500 credit in lieu of providing the statement.
I universally recommend that my selling clients elect to give the buyer the credit rather than the disclosure statement. In my view, and in the view of most other lawyers I’ve done closings with, the $500 is a small price to pay to avoid the risk of a dispute or suit about the disclosure statement after (or even before) the closing.
In all of the form real estate contracts in use in New York, there is an “as is” clause, though most contracts provide that appliances will be in working order at closing. Sometimes there will be deal-specific provisions varying the as is or working appliance clauses.
I know this is a hijack, but I’m always amazed at real estate that is significantly below market value for where I live.
$68,000? I wouldn’t imagine I could get a house like the one in that ad around here for less than 3x that, even if it had problems and was in a crappy part of town.
Around here, “As is” means some major repair is needed (like a roof) or it’s an estate sale and the owner(s) have set a low price to avoid the post-inspection negotiation. Or both.
Sometimes, it means it needs to be gutted. You can usually tell which from the price: 75% of median indicates repairs, 25% means major overhaul.
Go see it.
For that price in my neighborhood, I would expect a house that needed to be torn down to make the lot buildable.
But this is in a town where the median family income is around $42,000, IIRC. What’s the median family income in Burlington, VT?
And FTR, that house in Mrs. Heyhomie’s home town in rural southeastern Missouri wouldn’t cost more than about $40,000, tops.
FWIW: Cute house! I hope things work out for you, and the “as-is” is nothing you can’t handle. When was it built - the 1920’s?
Realtor here, but state laws and local practices are different.
In my area, an “as is” clause is usually a hint that no matter how much you bitch and moan, the seller will not fix anything not required by law, nor adjust the price to compensate. This is often done by estates or banks that have foreclosed and now are saddled with property they want to dump without hassle. Banks don’t want to haggle and they are often landlords far away – distant in more ways than one. A home to them is just a pile of bricks or lumber and making it habitable is your problem; they are not known for sympathy.
An estate trustee may have little knowledge of a deceased’s property details, and wants to unload it and wrap up the estate books.
So banks may reduce the price in stages until sold, but they don’t encourage counter-offers or special conditions. Take it or leave it.
I also live in Chicago, but I have a different understanding of “as-is.”
When I was looking at properties within the last 2 years, “as-is” typically meant that the house had a basement apartment that could be rented out, but the house was not zones as a multi-unit dwelling.
Chicago has been cracking down on properties that have basement rental apartments without proper zoning–regarless of whether the unit is actually occupied by a renter. To protect against a possible future enforcement action by the city (for zoning violations) or the country (for back taxes), the seller listed the home “as-is.” My realtor told me that if the illegal apartment is discovered, the kitchen must be removed from the basedment in order to bring the home into compliance.
Not wanting to deal with any future legal problems, I generally stayed away from such properties.
Here in SE Michigan, I’ve always interpreted as-is for houses to mean that (a) full disclosure per the law; (b) you’re welcome to your inspection; but © it’s as is, and the seller won’t repair or replace anything as part of the deal making process, i.e., don’t ask for a $3000 deduction because you’ll need a new roof in three years; it’s as-is.
In many (most) states, the law provides that even when selling “as-is,” a seller is still obligated to disclose any known material defects. The as-is clause should not be used as a cover for known problems. But it’s probably a flag that the seller thinks there might be additional problems that he or she has not discovered.
As people said, it’s a potential land-mine, but most often it’s code for “Don’t bother to try to force me to repaint, replace windows or do some other minor shit in order for you to want to buy it. That’s your job.”
Get a good housing inspector to look over any property you’re serious about.
Thanks! It was probably built in the 1930’s - that’s about when that part of Springfield started getting built up.
BTW, that house is 1,662 square feet! You could never tell from looking at the pictures. That master bedroom is 10.6 X 22!!!
I was house hunting all spring, in Minnesota. Here, a listing stating “as-is” had a very high chance of being a bank owned house. It means they are not going to agree to resurface the driveway or fix the cracked windows as part of the selling negotiations.
My neighborhood’s median family income is $42,724. The average listing price of a home in my neighborhood is $245,341 (and we’re looking at an average of 1200 square feet or so, although you’ll get a backyard, garage, and unfinished basement in the deal). It’s just a lot cheaper to live outside of major metropolitan areas, it doesn’t necessarily have to do with median family income, although that certainly is one component of pricing and market forces.