Despite competitive real estate market, a house selling ‘as is’ can still be inspected
By Thomas Haught
In my 23-year career, 2021 was the fiercest, most competitive year that I have ever seen for prospective purchasers of a home.
We had homes that were listed at 9 a.m. and were under contract before noon on the same day, while the seller had multiple bids. We saw sellers receiving 20 or more offers in the first day of a listing. We saw purchasers offering to pay far greater than market value to try to lock down a property. While we do not expect this year to be quite as crazy, with mortgage rates still hardly above all-time lows, we do expect a robust year for the residential real estate market.
Of the very large percentage of the contracts that my office received last year, the “as is” paragraph was initialed by both parties. Sellers generally were not interested in going under contract with any purchaser that was not willing to purchase the property “as is.” The only problem? In almost every case, neither the purchaser nor the seller actually knew what buying a property “as is” really meant.
Sellers believe that if a purchaser agrees to purchase “as is,” the deal is done. Purchasers simply must get their financing in place, and we close. But this is not true.
Purchasers believe that, despite “as is” being a very plain and simple turn, they can still do an inspection and request that the seller make repairs to the home prior to closing. For some reason, purchaser believe this is especially true if the inspection issue is related to a health or safety issue.
Let’s dispel the myths right now. This is what “as is” actually means in the context of a real estate transaction: it means that purchasers can have a timely inspection done, by a licensed or certified home inspector, and if the purchasers are not satisfied with the condition of the property, based on that professional inspection, purchasers can cancel the contract and have their earnest money returned. That’s it. Nothing more, nothing less. The purchaser is not actually locked into a contract and the seller does not have to entertain any requests for repairs or inspection credits. It is quite simple really and, I would argue, fair for both the seller and the purchaser.
If you decide to seller your house “as is,” do not have the false sense of security that you have the purchaser locked into an unbreakable contract. If you decide to purchase a house “as is,” remember that you still have the right to have a professional inspection. If that inspection goes poorly, you still have the right to cancel the contract and have your earnest money returned.
Gardi, Haught, Fischer & Bhosale, Ltd., has helped thousands of clients buy and sell residential and commercial real estate in the Chicagoland area.