Buying a house as-is can present opportunities and challenges. Here’s what buyers should know before making an offer.

When browsing home listings, you may come across a property listed “as-is.” This means the seller is offering the home in its current condition and typically will not make repairs before closing. Before deciding whether to purchase an as-is home, it’s important to understand the potential benefits, risks and steps you can take to make an informed decision.

What an as-is listing means

Listing a home as-is is the seller’s way of letting buyers know they are generally not willing to make repairs or offer credits for defects. Buyers must accept the home in its present condition unless otherwise negotiated in the purchase agreement.

The home’s defects can range from relatively minor, like needing cosmetic updates, to major problems such as structural issues, a leaky roof or an HVAC system that doesn’t work. In some cases, the home’s defect pertains to the property it’s located on, like being in a flood zone.

There are many reasons for selling a house as-is. A few include an owner who simply doesn’t want to handle repairs, an owner experiencing financial hardship or an owner who may be deceased and whose heirs want to sell the house with as few hassles as possible.

The advantages and disadvantages of buying a house as-is

Clearly, as-is homes are not perfect. For buyers, this can mean an opportunity to get a home for a lower price. Also, it’s likely there will be fewer competing offers because many buyers avoid homes listed as-is due to concerns about repairs and unexpected costs.

Another advantage is if the home is in a desirable neighborhood with high home prices, its as-is status may allow buyers who can’t afford homes in better condition an opportunity to live there.

On the flip side, buyers may face additional expenses for repairs. In addition to out-of-pocket costs, there’s the cost of time. The new owners will spend time on DIY repairs, hiring and managing contracted work or possibly doing both. While the repair work is temporary, it can take a long time, costs can rise above estimates and the process may be stressful.

If you buy a home as-is, due diligence is required

Buying a house as-is doesn’t mean taking a leap into the unknown, but you must complete your due diligence before moving forward.

• Get an inspection of the home, any structures on the property and, if present, the septic system and well. Review the inspection report(s) in detail with your inspector(s).
• Ask the seller questions about previous work done on the home and the age of components like the roof and HVAC system.
• Review where the property lines fall and get a survey if the lines aren’t clear.
• Check if the property is zoned for its current use.
• If the home is subject to historic preservation regulations, find out what they are.

An as-is home can offer an opportunity to purchase a property that fits your budget, but it’s important to understand the risks and costs involved before moving forward. When you’re ready to take the next step, our team can help you explore options to finance a home and find a home mortgage that fits your needs. 

 

 All loans subject to approval. Rates, terms, and conditions are subject to change may vary based on credit worthiness, qualifications and collateral conditions.