I’m Selling/Buying a Home “As Is” – What Does That Mean?

One of the most widely asked questions of sellers and buyers of real estate is, “What does ‘as is’ mean in the contract?”  And the follow up questions vary depending on whether the client is a seller or a buyer.

A seller may ask, “Do I need to repaint the walls and replace the carpet?” “What about that hole in the wall from the pictures that have been hanging up for years?”  “The garage door opener doesn’t work – do I have to fix it before I list the home?”

On the other hand, a buyer may ask, “Do I not get to see the house and ask questions?” “Can I still conduct a home inspector with a licensed home inspector?”  “Do the inspection results not matter?”  “There is a huge foundational crack; do I have to take it or leave it?”

When the contract states that the Seller is selling the property “as is,” it simply means that the Seller will not agree to remedy, repair, or replace any defects that could exist on or in the property.  The Seller is listing the property for sale in its current condition, and that is what is being offered for sale with no affirmative requirement by the Seller to address, repair, improve, or issue credits for any defects found in the property by the Buyer.  

However, all hope is not lost for a Buyer here.  Notwithstanding the “as is” provision of the Contract, and so long as there is an inspection contingency provision in the Contract, a Buyer is entitled to conduct a home inspection of the property with a licensed home inspector and any other licensed professionals that will inspect the property pre-closing.  Following the home inspection, the inspector will issue a report and certain recommendations or findings of the inspection. The inspection contingency will likely state that the Buyer has the right to cancel the Contract if the Seller is unwilling to address or repair the issues raised as a result of the inspection report.

In the present real estate market, Laura and I have seen many variations and limitations of inspection contingencies: ones that limit a Buyer’s repair requests to structural and environmental defects; ones that are for “informational purposes only”; or even ones that are waived completely.  The language used is crucial to determine the scope of the inspection; the purview of the repair requests; and the remedies available to either party in the event of an impasse.

As attorneys, we believe that it is imperative that a client understands what this term of art means upfront.  While the “as is” clause does not vitiate the buyer’s ability to inspect the property, it is imperative that the clients are educated on what “as is” means and how it impacts their rights and remedies under the contract.

Disclaimer: The information contained in this post is not, nor is it intended to be, legal advice. You should consult an attorney for advice regarding your individual situation. We invite you to contact us and welcome your calls and communications. Contacting us, however, does not create an attorney-client relationship. 

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