The Art of Buying As-Is Properties Like a Pro

As-is properties, as the name implies, are properties listed for sale in its present state. This explicitly means that any structural problems that the property comes with will not be fixed or financially shouldered by the current property owner. For instance, if a bathroom pipe leak or a pest infestation behind the kitchen walls is identified during a comprehensive assessment by a third-party, the buyer cannot request that the homeowner first repair or pay for the damages prior to closing the deal. For this particular nature of the deal, buying as-is properties requires expert insight to curb the relatively higher level of risk. 

Identify Common Problems

It's easier to ascertain the potential repair costs of as-is properties by identifying commonly reported problems with this type of property. These potential issues include asbestos, malfunctioning air conditioning or heating systems, faulty pipelines, recurring mold problems, structural weaknesses, pest infestations, and Chinese drywall uses. Some problems are highly visible and are even disclosed immediately by the selling party. That being said, some problems may be minimal, and the property is likely being sold for reasons other than its structural soundness and value. 

Perform a Title Search

A title search can be done in DIY fashion or with the help of a legal professional. This process involves visiting your state county's assessor in person or online and then searching for the real estate being prospected for sale. You'll be able to see whether the property being targeted for acquisition is free from defects. In the context of real estate, a "defect" means anything attached to the property that may have an impact on the property's value or how difficult it would be to acquire it. Aside from the county assessor, you can also visit the local courthouse of the county in which the property is located. 

Work With an Independent Licensed Contractor

Although it's impossible to have the selling party resolve any issues with the property, you have every right and power to inspect the property as thoroughly as possible before making an offer and drafting a contract. Hiring an appraiser or a structural engineer to accurately determine market value and structural flaws may be well worth the upfront costs for their services, especially if you are looking to buy an expensive property.

Request For an Inspection Contingency

There is a work-around for buying as-is properties without assuming the inherent risks. Negotiate that the contract have an inspection contingency, which means that in the event that an inspector or appraiser finds any issues initially unidentified that the buyer does not want to pay for himself or herself, the buyer can break the contract with the deposit fully refunded. Another option that the buyer can take following a home inspection is to renegotiate a lower asking price to reflect these new-found problems. 

Although they come with additional risk, as-is homes also offer the benefit of relatively lower asking prices, which is ideal for prospective homeowners who are looking for fixer-uppers that they can either flip or work on upgrading over time.


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