As is: What cannot be said will be, be it respects of persons, of things, of an act, must be as it is.

-Simone Weil

From the book: Gravity and Grace by Simone Weil

All property is theft. -Pierre-Joseph Proudhon, 1840

Co-written by Alsisi’s staff.

As the real estate market fluctuates, new strategies arise to assist potential buyers in closing the gap on their dream home. One such option is purchasing property “as is” without repairs to the property, allowing the buyer to assume the existing condition of the home.

The definition of an comprehensive as is residential contract for sale and purchase is a residential purchase agreement that accepts the property in its current state without repairs being made by the seller. This type of agreement can be beneficial for both the buyer and the seller depending on the buyer’s ability to make repairs and the seller’s want of selling quickly without making costly repairs or updating the home.

“As is” contracts are not the same as traditional real estate sales contracts. They are often used when the owner does not have the funds or time to invest in improving the property prior to listing, or where the potential buyer will personally or financially benefit from purchasing the property without making a costly investment into repairs and renovations.

In America, over 40% of residential property sales occur through an “as is” contract. This is most common in urban areas with shorter transitional housing periods. Despite the legal ramifications of accepting “as is” contracts, buyers and sellers still take the risk of using them depending on their price range, geographic location, and overall interest in the property.

The pitfalls of “as is” contracts arise when the buyer does not have the monetary means to renovate the property. “As is” contracts are not an opportunity for buyers to skip over home inspections. Buyers should spend the same amount of time and effort investigating the home that they would need to do if they were purchasing property under traditional real estate contracts.

Buyers are advised to conduct any necessary background research into the condition of the home (such as hiring an inspector and reviewing available records) to avoid surprises and costly renovations after the sale has closed. Homes purchased “as is” are also sometimes purchased through a foreclosure, so there may be additional history of the condition of the home available through public record.

“AS IS” residential contracts have gained popularity as the American real estate markets have deteriorated in recent years.

The popularity of purchasing “as is” property continues as Americans face a downzoning of economic opportunities and retirement in the afar future. With the current economic states of many countries, would-be retirees or investors are looking to places like America for foreign investment opportunities, but are given a reviewing eye to buying real estate.

Increased demand and lower interest rates have resulted in a previous increase of money supply that is now disappearing. For this reason, people who purchased real estate with the idea that the bank would be eager to provide them with more cash after buying the property are now facing lenders who are less forthcoming with the expected additional funds and lower interest rates.

When taking the risks associated with purchasing property “as is,” owners should take care to emphasize the added value of their home by marketing any exterior or interior improvements. The owner should not feel the need to oversell the property. Listing the home “as is” with additional features that make the house unique (like a fireplace or balcony) may encourage buyers who work with the understanding that the property provides an opportunity for the buyer.

Additionally, “as is” contracts can be beneficial to sellers looking to quickly sell property. It allows them the opportunity to put some money in their pockets while simultaneously minimizing the time and energy invested in selling the property. While a home in disrepair may present an opportunity for reselling the property for more worth, this may not be the case for all sellers. Some sellers may seek the opportunity to quickly turnover the property without investing the resources where the property is located in a region where development opportunities are at a low.

Before entering a real estate contract “as is,” buyers should be aware of the types of “as is” residential contracts that exist. They should also understand the legal implications of purchasing in this way, and how local laws and ordinance may affect the purchase.

When selling “as is” property, it is advisable to contact an attorney or real estate professional to discuss the legal implications.