Profile picture for tricerealtor22

What does "as is" mean when it is being sold as a Bank Owned? A Short Sale?

Does it mean you have to accept it "as is". Should you still do inspections? Will the Bank do any repairs? What if it pretains to Health and Safety? Will the Bank (or list agent) then have to disclose any deficits to the next buyer? Can the Bank credit the buyer at COE for any needed repairs?
  • September 18 2010 - US
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Answers (12)

All terms are subject to change no matter how the home is listed. The bank does not want you to t5hink you can get them to do repairs so they advertise it as is. have your Realtor write the offer giving you time to do your due diligence and then ask for the repairs. Like my dad used to say, "you don't ask, you don't get". And really why would a bank want to let one of theri properties continue to accrue monthly expenses of all sorts when they have a qualified buyer almost to the finish line.
  • September 20 2010
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You can go ahead and get a inspection but regardless of the outcome, the purchase is still a "as is". should you decide to purchase the home.
  • September 20 2010
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Just cause your taking the home As Is doesn't mean you should skip the home inspection.  I always suggest to my clients to still do a home inspection.  You should know in what condition you are buying the property, even if the bank is saying they will not make any repairs.

FYI,
Sometimes banks WILL have to make repairs if the repairs are called out by the buyers lender.  I have gotten repairs made after home inspections on Bank Owned homes, even though they always say AS IS.

For your Protection, Get a Home Inspection...
  • September 20 2010
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Profile picture for tricerealtor22

My experiance with Bank Owns and Short Sales is the bank will do repairs and or credit your buyer's closing costs. If you are too intimidated by "AS IS" to ask then you will not receive either.

These were small things but did make a differance to the buyers. I asked once for $2500 towards buyers closing costs in lieu of repairs and the Bank obliged! The list agent wasn't too happy with my requests but did make the effort!

  • September 20 2010
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Reading though the responses it appears that there are state-by-state and seller-type differences in "as-is".

In the Texas purchase agreement there is a paragraph with two check boxes. One or the other must be selected  or the contract is unenforceable. The choices are
"As-is," or,
"With specific repairs."

Here, as-is does not mean the buyer agrees to take the property as-is, but only that the buyer has not yet specified what repairs are requested.

Here, "with specific repairs" does not mean the buyer agrees to take the property with only those specified repairs, but rather the specified repairs are specifically requested by the buyer.

Fun,huh?

The point is clarified later in the agreement when, in Texas, an "Option period" is denoted giving the buyer an unrestricted right to inspect and disolve the agreement within NN days (usually 14 days). 

So, the buyer inspects and then may ask the seller to complete certain repairs, regardless of which of the two boxes are selected.

Use care when a seller uses their own contract form or addendum because as-is language on those forms could be enforceable.

  • September 20 2010
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I have found it very likely that if something arises in the inspection that is major, most sellers or banks will make the repair in order to get it done. As is isn't quite that clear in terms of what they will or will not fix. In fact, in my experience most banks will fix things to make a home pass the appraisal.
  • September 20 2010
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As is usually means the Bank does not want to do any repairs. You must get an inspection so that you know what you are facing and if there are any costs you need to pay for to bring the property to muicipal standards. If the bank knows of any defects they need to disclose them.
If there are defects in the house and the Bank refuses to do them, then it is up to you to decide if you want to go for a 203K FHA mortgage. The appraiser will then let the lender know if it pays to do the repairs.
  • September 20 2010
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As-is can be overused and misused. Typically when a 'seller' has not lived in the house like bankowned or investment property, the seller will use as-is to indicate they have no knowledge and make no representations.Further it implies they will make no adjustments in its condition to effect a sale to a buyer. As-is can means what you see is what you get! It does not prohibit an inspection but you must rely on that contingency/condition in your agreement rather than the seller's interest in repairing, correcting or making financial adjustments towards defects or repairs. As far as the bank as the seller, there is nothing prohibiting credits at closing as long as it meets your lenders limits and policies about seller paid Credits at closing but many times the bank selling will have policies that don't allow credits at closing or limit those credits to a $ amount. As far as the disclosure of known defects,if the broker (buyer or seller agent) has actual knowledge of a known defect, they must disclose. The same applies to the seller but this as-is is an attempt to make no representations or disclosures. If there's a health/safety issue or the seller needs a septic inspection (Title 5) to transfer, they can still put that responsibility on the buyer and ask the buyer to pay knowing it must be completed in order the transfer the property. If it is clear that the heating system is not operating, the agent should disclose that the heating system does not operate. As you see, this as-is can mean so much. More important, is the question of any conditions of a purchase that allow the buyer an out of the contract obligations pending determination of certain facts or pieces of information. It's up to you to obtain the answers that you want/need and make your offer conditional upon getting satisfactory results and answers. I advise that you review the terms of any offer with a real estate attorney too.
  • September 18 2010
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Typically "as is" means just that, however, that does not mean that you can't have the property inspected.  Many companies give an inspection period to allow buyers to check the property out.  If there are unknown issues that come to light after an inspection, many times the contract can either be re-negotiated or terminated. 
  • September 18 2010
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Profile picture for wetdawgs
"does the bank or listing agent have to disclose defects to the buyer?"   In most states, disclosure statements are required but only have to be filled in to the knowledge of the bank or the agent (if the actual owner is not around).  the bank or the owner or agent is not responsible for doing an inspection before filling in the disclosure form

an inspection is recommended so the buyer can plan appropriately.   Don't expect on money for repairs credited at closing, "as is" simply means "as is and we won't pay for repairs".  

If it affects health and safety, then the buyer has to get the appropriate loan to cover repairs before moving in. 
  • September 18 2010
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Profile picture for Reallyfedup
It means don't expect to get any money for repair issues that may arise from the home inspection. The buyer can and should do a home inspection so that they know what they are getting into, but will be buying it in the condition that it is in.  They can still walk from the deal after doing the inspection if any issues are too much for the buyer to deal with.

The buyer can always ask for credits or repairs, but As-Is usually means not going to do anything.
  • September 18 2010
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Profile picture for remaxagent33
The bank is selling it as-is as it most likely will not do any repairs that arise in the home inspection, which you should def do. I did have a bank repair a hot water tank because there was no hot water and it wouldn't pass FHA without hot water. This was bank-owned. Most likely with short sales, banks from what I've seen are sticking with "as-is".
  • September 18 2010
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