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Tuesday, July 10, 2007
What is an "as is, or present condition" sale?
It's not easy
to know from an advertisement what "as is" means with respect to the sale of a residential property. It can mean that the
property is being sold in its present condition and without a guarantee. In other words: The seller makes no guarantees about
the property's condition.
In some states, like California, sellers may provide a general warranty of
habitability when they sell a home. Generally, this means that the roof is free of known leaks and the dwelling systems like
plumbing and electrical are in working order. With an "as is" sale, such a warranty probably wouldn't apply.
Probate,
trust and foreclosure sales are often "as is" sales. The sellers of these properties could have acquired them under adverse
conditions (either because a relative died or because a buyer defaulted on a mortgage). In these cases, the seller might have
little, if any, actual knowledge about the property's condition. In many cases, sellers of probates and foreclosures haven't
even seen the properties.
FIRST TIME TIP: Before you agree to purchase a property "as is", make sure that you have
it thoroughly inspected. If it's a foreclosure, you might not be able to include an inspection contingency in the purchase
contract. In this case you'll have to complete inspections before you make an offer.
Buyers purchasing a property that
they intend to renovate extensively often prefer to purchase the property on an "as is" basis. For example, if the house has
a $15,000 termite bill and it needs a new $10,000 roof, the buyers might prefer to reduce the purchase price by $25,000 and
buy the property "as is".
An "as is" sale doesn't necessarily mean the property is a good deal, nor does is mean that
the property should be dismissed as unacceptable. Find out the nature of the work required to put the property in first-rate
condition. Then decide if you're up for the project.
THE CLOSING: If an "as is" property will go well with your long-term
needs when it's fixed-up, it might be worth considering.
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2007.07.01
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Buying a home can be one of lifes most exciting experiences and one of the most challenging.
See you neighborhood from a virtual Helicopter just right click on Helicopter Fly-Over Mapping and enter your address at the top of the page, then click on the 3D icon to the left of center.
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Working with a Steve or Hilma Timper ensures that your transactions will be handled professionally – which is why
it makes sense to talk to us before you buy or sell!
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