What is an “as-is” real estate purchase agreement?

| Apr 23, 2016 | Real Estate Transactions

Purchasing a home is a substantial investment for most people.

Whether it’s a primary residence or vacation home, buying any type of real estate should be done with care and meticulousness. Intricate language is often found in these agreements.

Many include as-is provisions and understanding what they are and the risks involved are extremely important.

In some situations, a home is immaculate and move-in-ready. Electrical and plumbing are working properly and the structure is sound and up to current code standards. Even cosmetic improvements have all been completed and there are no serious issues that could arise between the seller and buyer.

In other situations, a home is in need of major work. Maybe the property has severe foundational issues or extensive insect damage. Maybe the property is a foreclosure and the bank that now owns it isn’t aware of the history or present issues.

Typically these homes are priced accordingly but sellers often include as-is provisions in the sales agreements for these properties.

An as-is provision is basically a clause in a real estate contract that states the buyer will purchase the property in its current condition with all apparent defects listed in the seller’s disclosure statement.

Such provisions also limit the seller’s liability for any such defects-but only for certain defects. If a seller is aware of detrimental issues with the property, such as a prior mold outbreak or flood, and fails to disclose them, they could be held accountable.

Those thinking about purchasing real estate but are weary of some components or potential issues of a specific property should consult with a legal professional knowledgeable in handling real estate matters, contracts associated and the language therein.