Selling Your Home in AS IS Condition...What that Really Constitutes!
By Matt
May 9, 2013

Often times sellers put their home on the market and list it to be sold in AS IS condition. This means that they will not do any repairs, will not offer any credits and will not give termite clearance. There intention is to do just as they say...sell the home in it's current AS IS condition!

However as many home sellers are experiencing in this current real estate climate, this is not always possible. Depending on the condition of the home and the type of financing the buyer is using to purchase the property it may be out of the buyers and/or sellers hands. Often times appraisers will make remarks in their reports to the lender that require certain repairs be made, especially when it comes to health and safety items. One of the more strict types of loans and appraisal guidelines is the FHA loan, which had gained popularity in recent years but has lost steam due in part to the strict appraisal guidelines. These buyers are often times coming to the table with limited funds and cannot make the required repairs. When this is the case the seller can be left with little option, but to make the lender required repairs. Now in this current market sellers are in the driver seat and often have multiple offers that they can select from which can help to avoid the FHA offer. However even conventional financing can have appraisal repair issues and if a home is too far gone than that can leave the contract in a precarious spot.

Beyond buyer financing/appraisal issues sellers also sometimes have to deal with City required repairs. Like the Cities of Pasadena and Monterey Park here in my local market often require. Moreover sometimes sellers will have to do some types of repairs if major systems are failing regardless of what an appraiser or lender has to say. If the property is in a substandard condition and there are enough comparable properties on the market at that time it can be the only way to get the home sold. Buyers will more times than not take the path of least resistance if two like properties are selling at essentially similar values. They would rather not have to make repairs or deal with ongoing maintenance issues. With the rare exception being that a property has some feature that the better condition home lacks. Usually a view, extra parking or proximity to a desired school/amenity are reasons to overlook a similar property in like condition.

The point of this article comes back to one of the most basic principles in real estate and business in general....all things are negotiable! Buyers and sellers will always have the freedom to make requests regardless of some upfront notion of AS IS or the like. Once again good Realtor(s) is/are someone who brings these two sides together regardless of their most basic human nature of doing the best for their particular interest.