Homebuyers scouring listings for the perfect home have likely come across the phrase "being sold as-is." 

Sometimes these homes cost less than the average market price as the seller is offering up exactly what you see with no chance of repairs or credits. While this could be a boon for your home search, there are plenty of pitfalls to consider. 

That is why the team at Prevu Real Estate put together some topics aspiring homeowners should consider when buying a home “as-is.”

What does "as-is" mean in real estate? 

Simply put, buying a home "as-is" means purchasing a home as you see it, without any warranties or guarantees about its condition. You are embracing the Property in its current form, with no expectation of repairs or renovations made by the seller. 

Homes sold with this phrasing can be pristine properties or ones with common issues ranging from cosmetic damage to old appliances. Either way, "as-is" means the owner is unlikely to concede any repairs or credits and the property is sold in its current state. 

The pros and cons are that you might be able to get a good real estate deal, but the home can have major problems and you need to be prepared for the additional time, effort, and money that may be required to make the property habitable or suitable for their intended use.

Why do people sell homes "as-is"? 

When time is of the essence, an as-is sale is an easy way for a seller to part with their property quickly. Homeowners also sell a home this way if there are issues they cannot afford to fix themselves.

Either way, an "as is" deal usually means a quicker sale, as there is little negotiating other than the purchase price. So if there is an issue, sellers don't have to stress over repairs. 

This may mean a lower sale price, but the new owners must invest time, effort, and money into making repairs. If you're handy with tools, a home with issues may be an opportunity. 

What issues do "as-is" homes have? 

When buying a home sold “as-is", you may have to face repairs and renovations that can require a hefty budget, though this depends heavily on each specific property.

These can be simple things like cosmetic deficiencies with damaged flooring or nail holes in walls, or even just old appliances, where a fix can be relatively easy if you have the capital on hand. Other times, you could face more significant problems like foundation cracks, settling, damage to load-bearing walls, or faulty HVAC, plumbing, and electrical systems. 

How to safely buy a home "as-is"

Depending on what state you are in, the seller will typically be required to relay all the issues they know about in the seller's disclosures. That being said, you should still get a home inspection ordered. 

Buyers need to be aware that when purchasing a property "as-is," they are assuming all the risks and responsibilities for any necessary repairs or upgrades. It's crucial for buyers to conduct thorough inspections and due diligence to understand the property's condition fully.

You want to hire a certified home inspector to look at all of the systems of the dwelling. Their inspection tells you about the condition of the property, yet it does not guarantee that you can back out of the purchase agreement unless you have an inspection contingency. A real estate contract for an “as-is” purchase may or may not allow for an inspection contingency so be sure to speak to your real estate agent in advance.

Lastly, make sure you budget for fixes before finalizing any property sales. If the seller could not handle the costs, you want to ensure the same thing does not happen to you. 

How commission rebates can help you buy a home "as is"

It is a good idea for a homebuyer to have an experienced real estate agent during a home purchase. They can help you navigate the transaction, review the seller’s disclosures with you, and handle communications with the listing agent during the transaction.

But most importantly, some agents can provide you with a commission refund. Also known as a commission rebate, this concept allows your buyer’s agent to give you a portion of their commission.

Modern brokerages like Prevu Real Estate combine salaried agents with digital homebuying tools to unlock savings for buyers. These rebates can be invaluable as you prepare for any purchase. 

For example, if you buy a house from a seller for $1,250,000 with Prevu, you can potentially receive up to $24,000 cash back via the company’s Smart Buyer Rebate after closing. 

These crucial savings can go a long way once you move into your new home.