Considerations

C - Selling "As Is": What are the pros and cons?

What selling “as-is” means:

As-is means that you make no warranties or representations as to the property’s condition.  You’re selling it, as it now exists. However, you must still disclose all known defects in a house or condo sale. 



It also means that you’re not willing to make corrections to problems that you are disclosing or to defects that you are unaware of, including those that could surface after the property changes hands. 

The pros–when used:

Selling as-is can be found in a hot real estate market simply because the owners have the power. They don’t want the hassles and expense of repairs and buyers don’t have the leverage to be as picky and demanding about the condition of the property. Another reason for selling as-is is that sellers don't have the money to correct existing defects and therefore choose to offer the property at a lower asking price.

Some sellers use this approach because they don’t want to be liable for repairs after the sale is complete. It's also commonly used if the home is an estate, if the sellers didn't live in the property and aren’t familiar with possible defects. An as-is property doesn’t have to mean there are any problems.

The cons–when not used: 

In the typical marketing of a home, selling as-is simply isn’t used. Not specifying as-is when trying to sell a property actually "implies" a willingness on the owner’s part to sell a product in an atmosphere of fairness, responsibility and good conscience.

Buyers of as-is property will take into consideration the condition of the property and disclosure of defects when they make their offer. When you enter into a contract, the buyers most likely will make it contingent on a home inspection. The contract is usually worded so that the buyers can void the deal if they are dissatisfied with the findings, especially if you are insisting on not negotiating resolutions to newly found problems. 

A broken deal means you will have to start all over again to find another buyer. If the inspection turns up new problems, you will be legally obligated to disclose these problems to future buyers, since you are now aware of them.

  The bugaboo with marketing as-is:

It puts a stigma on the property (what's wrong?) in the minds of the buying public. It will stop the majority of buyers from even looking at your home. That includes a lot of good, potential buyers. 

Whether you sell your home as-is or not, you can’t escape liability and the potential of a lawsuit if something surfaces that you did not disclose and it’s determined that you knew of or should have known of the defect. Oh snap! 

                                Consult an attorney

State law may be a factor in selling as-is. Due to liability issues, consult an attorney when considering this option.