Should You Buy A Home Listed “As-Is”

homeAfter the recent housing crisis, buyers were seeing more and more homes listed “as-is”.  This is a strategy that was being used to benefit sellers, but what was not always clear was whether or not this was a good deal for buyers or something that would pose problems later, states Dean Graziosi.

In legal terms, “as-is” is typically used to cover more than the reluctance on the seller’s part to make the necessary repairs that the home may need.  It is also used to release the seller from any liability or responsibility for the current condition of the home.  This means that the buyer purchases the home without a guarantee that it does not have any major problems.

In the majority of cases, there is a reason why a seller chooses to sell their home in “as-is” condition.  This makes it even more important for potential buyers to have a professional inspection performed on the property.  You should choose an inspector who is experienced, and will know what to look for during the inspection process.  An inspection is a valuable source of information for buyers; it can provide them with information relating to problems with the property and may even show them areas that may become an issue in the near future.  If you’re interested in a home listed “as-is” you should always have an inspection performed.

When purchasing a home listed “as-is”, it is important that the buyer understand that repairs on the home will likely not be made.  If the home is an REO, which is a home that is owned by a bank, it may be possible to negotiate some type repairs being performed.  This is especially true if the repairs will be taking care of any safety issues in the home.  Repairs may also be made if there are government mandates that must be followed in order for the home to be sold.

If you’re a buyer who has the ability and funds necessary to make some of the repairs needed, then you may not have a problem purchasing an “as-is” home.  However, if you do not have the necessary knowledge or skills, the purchase of an “as-is” home may become rather expensive.  Once you finalize the sale of the home, it is your responsibility to maintain and repair, which means that you should only make the decision to purchase after you have thoroughly thought over everything that is involved in the process, states Dean Graziosi.  Purchasing an “as-is” home is not a decision that should be rushed into, it should only be done after you have decided it is something that you can financially live with.

The Risks of Buying “As-Is”

When you buy a house “as-is”, that’s exactly what you get. While this may be a good opportunity to fix up a home just the way you want it, it can also mean big problems. Dean Graziosi sites the economy as one reason for many houses being sold just as they are. If you are planning to make such a purchase, it is very important you know what you’re getting into beforehand.

 

When a home is listed “as-is”, the seller is released from any liability or responsibility for the property’s condition. While buying one could mean you get the home of your dreams, the situation could very quickly turn into an all-out nightmare.

 

Before purchasing a home “as-is”, be sure to have it inspected. It is extremely important you know what you’re getting into before you ever make an offer and later sign for your new purchase. When choosing an inspector, make sure the person has been in business for many years and his or her reputation is top-rate. Otherwise, you might wind up getting the wrong information and making a bad decision as a result.

 

Knowing how the home is being sold will also help you make a decision on whether or not you should purchase it “as-is”. For example, If the sale is a real estate owned property, or REO as it is often called, this means it is a property that is owned by a bank after foreclosure has occurred. In the case of a REO, you might have a good chance of negotiating repairs. This may especially work in your favor if safety is an issue.

 

A short sale occurs when a home owner’s mortgage balance exceeds the property value. It isn’t likely repairs will be required. This is because the owner is selling it in this case and will probably need to make the sale as soon as possible and won’t have money to facilitate any repairs.

 

Often times, buyers will walk away from an “as-is” property because the work involved will be too costly. According to Dean Graziosi, “This is a smart decision, if you discover that the home is in worse condition than you originally anticipated.”

 

Once the “as-is” home has been inspected, you’ll have a better idea of any costs associated with fixing it up. You may get lucky and won’t need to do very much, but odds are, anything listed “as-is” will need quite a bit of work. If this is the case, you’ll need to make a decision. If you do not have the money or means to do the work yourself, purchasing “as-is” would definitely not be the way to go no matter how much you really want the house. On the other hand, if you have the money to hire someone to do the work for you, or if you are able to do it yourself and can afford the materials, an “as-is” property might just be right for you. Check Dean Graziosi’s website for more information on purchasing “as-is”.