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Unread 06-01-2008, 01:35 PM
 
199 posts, read 562,249 times
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Default What does "sold as is" mean?

I am interested in a property for investment purposes. It is a forclosure. I contacted an agent who gave me some info on it and I'm going to go see it this week. He said because it is a forclosure it is sold as is. He said that means I won't get any documents making representations as to the soundness of the roof etc. It's a newer condo in a multi-unit building so I don't think the roof is an issue.

Anyway, is this true since it is a forclosure and what exactly does that mean? Also, I contacted the same realtor company that has the listing. Will there be any problems by doing that? I guess the agent will be acting as the buyer's agent? It's not the same person as the listing agent. Thanks for your help. I've never worked with agents before.
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Unread 06-01-2008, 02:30 PM
 
Location: Knoxville
3,186 posts, read 9,020,686 times
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As-is means that you the buyer are responsible for any problems you encounter when you buy the property.

You should get the best home inspector you can find to check it out before you buy it.

When I hear a home is listed "as-is", it usually means to me that the seller knows there are problems with the house and they don't want to deal with them. Foreclosures are not the same since the "owner" hasn't lived in the house and has no idea the condition it might be in.

You should always be cautious when something is advertised as-is.

Get a good inspector and be careful.
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Unread 06-01-2008, 02:35 PM
 
Location: Cary, NC
18,332 posts, read 26,604,764 times
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Sold "as-is' means different things to different people.

It is extremely important that the parties to the transaction are working with the same definition of "As-Is.".

"As-Is" can include title impairment, environmental issues, physical condition of the property. Whatever you can imagine.

Basically, "WYSIWYG" and then some...

Have "As-Is" clarified before you go under contract.
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Unread 06-01-2008, 02:53 PM
 
Location: Palm Coast, Fl
2,248 posts, read 5,384,908 times
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Depends on where you are and who you are.
For me, where I am, in Florida, and using the term and contract from the state of Florida it means nothing more than the seller is offering the house on the terms that they will not be subject to repairing anything. Doesn't mean that the house is in bad shape or there is something wrong with it at all...just means they don't want to deal with any further nitpicking or repairs for anything other than the warranted items in the contract. Such as the roof, the structural items, the a/c, etc. They aren't going to dicker with you about a tile cracked or that the caulking in the tub needs to fixed or anything else. Just come in with your offer without expecting them to repair anything other than the warranted items.
It also, is a HUGE escape clause for the buyer which is why I generally will encourage my buyers to use it. They can be released from the contract without penalty for ANY reason within the inspection time frame. So, if the inspector they have comes up with a bunch of small ticket items or things that are not warrranted in the contract and the total to repair them is more than the buyer wants to dish out, then they can get out of the contract, no questions asked, no hassel to them. They can also, at that time, let the seller know that if they want to keep the deal together then there has to be an adjustment made.
IMO, 'as is' means nothing more than more protection for the buyer and less hassle for the seller.
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Unread 06-01-2008, 02:57 PM
 
529 posts, read 1,706,184 times
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Be very careful. Just because it is a foreclosure, it doesn't mean that you are getting a good deal. You might wind up spending thousands or tens of thousands in repairs before the house is ready to rent or "flip". Even if you are getting a good deal - you are still taking chances. You may or may not find a renter or buyer anytime soon and you will still have to pay the mortgage.
Make sure you also do a "title search" before buying. When you buy the house, you might also be responsible for any liens on the house. If someone wasn't able to pay their mortgage, they probably couldn't pay the taxes on it either and they might have borrowed against the house or they could have lawsuits that placed liens on the house

Good luck!
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Unread 06-01-2008, 02:57 PM
 
Location: Cosmic Consciousness
3,874 posts, read 10,595,224 times
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Barking Spider's description of "sold as is" is excellent, and the point is very important: any defects, from unclear title, to rotting roof, termites, bad plumbing, rot or warping from someone's overflowed washer or dishwasher, cracks in the walls, pet urine in the floorboards, to anything that will need fixing -- will be entirely the responsibility of the buyer.

Banks and other mortgage lenders which are foreclosing on properties usually DO sell such properties "as is" -- simply because as Barking said, they've never lived in the properties, and know nothing about them. (All they know about is the mortgage -- the loan.)

So as Barking said, get "the best home inspector you can find". Not one who will give you a lower price -- one who's been in the business, in the area where the condo is, for many many years and has an excellent reputation. Such inspectors are professionals and their opinions, recommendations and reports are worth their weight in gold in helping buyers to know what is really bad, really fixable, and really NOT fixable about a property. Don't scrimp on the home inspection!

As for the real estate agent, if the agent who is helping you is NOT the agent who listed the home you're interested in, you should have little or no problem with conflict of interest. I would feel comfortable proceeding with a professional realtor under those circumstances.

I've bought and sold a few homes for myself in a couple of states, and I assure you of this: DO NOT ASSUME THAT ANYTHING IN ANY HOME "ISN'T AN ISSUE". Please remember that!! Home inspectors of brand-new construction will sometimes find the most amazing mistakes and dangers that you'd never "assume" would be in a brand new house!!

Since you're considering purchasing a condo, MAKE CERTAIN YOUR REAL ESTATE AGENT OBTAINS A COPY OF THE CONDOMINIUM'S RULES & REGULATIONS (called Covenants in some places), FINANCIAL STATEMENT, and OPERATING BUDGET, as well as HISTORY OF SPECIAL ASSESSMENTS -- before you purchase or as a contingency in your buy/sell agreement. Your objective is to go over every sentence with the agent -- and/or with your real estate lawyer -- to understand:
-- exactly what is and is not allowed (you, not your tenants, will be responsible for obeying the covenants for as long as you own the condo);
-- exactly how stable the homeowner's association is;
-- exactly what kind of financial condition the homeowner's association is in;
-- how they use the money they receive in monthly dues from the owners;
-- how they have budgeted for future major projects (paving, roofing, exterior painting, siding, landscaping, pool refinishing, etc.);
-- and WHAT THEIR HISTORY OF SPECIAL ASSESSMENTS IS (you want to know if you're going to be hit anytime soon with the requirement to pay several thousand dollars in special assessments).

Your Realtor can guide and help you greatly. Your real estate lawyer can also guide and help you greatly.
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Unread 06-01-2008, 03:00 PM
 
Location: Ireland
650 posts, read 760,349 times
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Quote:
Originally Posted by palmcoasting View Post
Depends on where you are and who you are. [...] IMO, 'as is' means nothing more than more protection for the buyer and less hassle for the seller.
Thanks! I've been wondering about this myself--I wasn't sure whether or not to avoid the 'As-is' listings, but the prices or locations of some have been tempting. I'll take a second look now, but with caution; thanks for a very helpful post!!
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Unread 06-01-2008, 03:01 PM
 
Location: Columbia, SC
6,827 posts, read 9,681,819 times
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Just make sure you get a qualified buyer agent to look out for your best interest. One from the listing company is fine if they are qualified. Interview them a little bit and go from there. If you don't like answers then find another one.

These are very basic questions so you need good guidance.
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Unread 06-01-2008, 03:17 PM
 
Location: DFW - Coppell / Las Colinas
17,040 posts, read 14,144,468 times
Reputation: 15267
With an "as is" home you need to be a fairly sophisticated and experienced buyer IMO. You need to know what your getting into, the cost of repairs and have some contacts in the repair business.

If your looking for a really nice move in ready home, and a 1st time home buyer I would probably keep looking.
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Unread 06-01-2008, 03:23 PM
 
Location: Gary, WV & Springfield, ME
5,826 posts, read 5,645,027 times
Reputation: 17104
As others have pointed out, it generally protects the seller. A case occurred in IL where an older house was sold to a couple. They lived in the house for several years and one day the kitchen floor caved in, injuring one of the occupants. The couple sued the seller, claiming he must have known the the strength of the house or of that floor must have been compromised somehow prior to the sale. The house had not been sold "as is" and the couple won the lawsuit. If the seller had put that simple clause in when selling it, the couple would have had no recourse to sue the seller.

In some cases, it's a convenience term to thwart buyers who may not want to buy the property as it is offered and may want things that the property never had. I knew a couple who put their farm up for sale in FL. There was a structure which the buyer thought was a garage but there was no garage door on it. In fact, one end was open and seemed to have been made that way. It had been. It wasn't really a garage, it was originally a run-in barn where the farmer fed his cows. Circumstances changed and the pasture fence was moved back, the cows were sold and the farmer thought the structure would pass for a carport, but somewhere along the lines, he referred to it as a garage. The buyer insisted that a garage door be installed.

The issue is not whether or not the seller knows of an existing flaw in the house or on the property, but that the seller doesn't want to incur more expenses just to sell the house.

These are the things that can happen when the property is not listed "as is." Knowing what I know of buyers and lawsuits that occur years and years afterward, I would never consider selling a house or car without adding "as is." Nothing like it has happened to me personally, but I have read of the cases where it did happen and I do not care to experience such things.

As a buyer, you should always do your own due dilligence, see the property, hire an inspector, put in some elbow grease and check everything out. Chances are that there is nothing wrong with the property but the seller doesn't want the hassle of trying to make it "better" for a buyer that may never be satisfied.
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