What Does Sold "As-Is" Mean?

While searching for listings online, you may come across homes that are marketed as being sold “as-is.” But, what exactly does sold “as-is” mean for a homebuyer?

Most buyers expect that their transaction’s terms and conditions will fall under the scope of a traditional real estate deal — where the buyer and seller negotiate certain points in order to reach a middle ground that satisfies both parties.

To achieve this goal, it’s common that buyers will make requests to the seller that involve them fixing up the home, making repairs, or renovating before closing can happen.

But, what does “sold as-is” mean?

If you buy a home listed “as-is,” it changes this usual process by altering the responsibilities of the seller. As a result, the buyer may reap certain benefits, such as a quicker purchasing process. Since the pros and cons of buying a home as-is differ, it’s important for homebuyers to fully understand what does sold as-is mean before they move into a sold as-is deal.

What Does Sold As-Is Mean?

What does sold as-is mean?

As it sounds, a seller who has listed their home “as-is” means that they are selling the home in its current condition.

That means that the seller will not be making any repairs, updates, or changes to the property before the sale. The buyer will be taking ownership of the property exactly as it is, without having the option of negotiating work done on the home.

Selling a home as-is differs from the typical method of listing a home, where the seller is open to investing in home improvements to reap benefits — such as locking in a qualified buyer or increasing the sale price.

Why Do Sellers Choose to List a Home As-Is?

Sellers may decide to list a home as-is depending on their specific needs and circumstances.

Property owners who need to sell their homes quickly may decide to sell as-is because these deals see less back-and-forth between the buyer and the seller, which can be time-consuming. Or, perhaps the seller does not have the budget required to make any repairs or changes to the home.

While the buyer and seller will move through the escrow process as usual, selling as-is is incredibly straightforward. The seller has already made it clear that they will not be making any alterations to the home, and buyers know exactly what they are buying since nothing will be changed.

There are also instances where the home has been foreclosed and is now owned by the bank which will sell the property “as-is” to try and recoup their investment. It’s also possible that the homeowner has passed away, and the property is now owned by inheritors who are simply trying to sell the home.

Since the circumstances vary, it’s important to know why the home is listed as-is before you begin seriously considering purchasing the listing.

Should You Buy a Home Being Sold As-Is?

While it is possible to find a home listed as-is that is in good shape, it’s common that “as-is” properties are not in perfect condition. In many cases, sellers choose to sell as-is to avoid the costs and time required to get the home ready for sale.

Homes listed “as-is” may be in disrepair, and making that purchase will require you to put in the time and effort to fix the property that the seller skipped out on.

The answer to whether or not an as-is property purchase is right for you will depend on your financial situation, interests, and needs.

For example, if you want to purchase a home quickly and conduct a full renovation to customize the property, an as-is listing might be right for you. In this case, you’ll get the home for a lower price than a comparable home and you were already prepared to make the renovations.

However, if you do not have the bandwidth to take on a home with potential problems, it’s not recommended that you purchase an as-is property. These listings are naturally riskier, so buyers need to have the finances and time available to address any problems that may arise in the home.

Always Partner With a Top Agent in Your Market

Remember, when you buy a home as-is, you are not walking into the deal blind.

The seller is required to disclose any known property defects and a property inspection will be conducted to identify any hidden issues. While you will be able to negotiate the final price based on the inspection report, you will not be able to request any property alterations from the seller.

If you plan to look for as-is homes, always partner with one of your market’s top agents. Your best agent will be able to help you make the right decisions and mitigate any risks involved with the purchase.