As you look through the inventory of available homes, you'll notice that some listings advertise that a home is being sold 'as is.? What does this mean and is it a good idea? Well, what it is suppose to mean is that the seller is advising prospective buyers that no repairs or upgrades will be made to facilitate the sale. Sellers may elect to sell a home 'as is' because a home is deeply discounted. Or, sellers may elect to sell 'as is' because they are in a poor position to make any repairs. For example, estate sales, where the seller inherited the home or is an executor of an estate, are often labeled 'as is.? Is it a good idea to sell a home 'as is' or is there a better way to market the home?
In real estate, the term 'sold as is' is often greatly misunderstood by both buyers and sellers. Many buyers, particularly first-time buyers, believe that any home that is being sold 'as is' is defective. This is not necessarily the case. But, perception is reality. Consequently, many buyers will pass over a listing labeled 'as is' because of assumptions about a home's condition. Some sellers erroneously believe that selling a home 'as is' means they don't have to disclose pertinent issues about a property's condition. This is a very dangerous assumption. Selling a home 'as is' does not release a seller from their legal obligations to disclose all relevant facts concerning their property.
Buyers are not likely to waive their right to a home inspection. They may accept the 'as is' stipulation, but still reserve the right to withdraw their offer if they are dissatisfied with the results of any inspections. Furthermore, there are certain defects that a seller would be hard pressed to ignore. For example, termite damage, or infestations, and radon are two conditions that would be difficult to ignore since mortgage companies will not likely issue a mortgage on a home with such defects. Consequently, there's no guarantee that a seller can completely escape having to invest in repairs.
Due to the misconceptions of the phrase 'sold as is' and the inability for the seller to evade fixing certain critical defects it's probably best to avoid using the term at all when marketing a home. Technically speaking, unless your lawyer does a particular poor job protecting your interest, every home sale is 'as is.? As long as a seller is honest in their disclosures, once the transaction is closed, a seller has no further obligations to a buyer.
A better way to handle matters is to market the home without any special stipulations. When you receive an offer from a buyer and negotiate the final terms you can broach the topic of limiting repairs. During attorney-review the attorney can amend the sales contract so that the seller will only address a very finite set of issues (e.g. pest control, structural, code violations, etc., etc?) or limit repairs to a small monetary amount. This will limit the buyer to a narrow set of items that they can request to fix.
In summary, using the terms 'as is' in the marketing of a home can turn off prospective buyers before they even see your home. Furthermore, there are certain defects that a seller can't circumvent fixing anyway. So, avoid the use of the term altogether. Price your home right. Market the home honestly and stick to positive terms. Once you receive an offer from an interested buyer you can negotiate limiting repairs to a fix set of items or monetary amount. This approach should result in a faster sale.
Ed Chaparro is a licensed New Jersey real estate agent with Prudential New Jersey Properties servicing Metuchen, Edison and near-by communities in Middlesex, Union and Somerset counties in New Jersey. Ed Chaparro has over twenty years of experience working with technology and putting it to use to help people and businesses. Ed Chaparro mixes traditional real estate marketing (MLS, signs, direct mail) with a very aggressive Internet marketing plan that maximizes the number of buyers reached. For buyers, Ed Chaparro provides methods and communications that enable them to view their options in manner that is efficient, informative and free of any hard-sell tactics. This approach has garnered Ed Chaparro a great deal of buyer loyalty. For more details and information please visit http://www.EdChaparro.com |
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