While browsing on the real estate market for your next investment; you might come across a property listed to be offered ‘as is’. Although a term not going along with every listing on the market; it is used quite significantly to indicate what will be offered to the buyer.
In reality home selling or buying process is quite lengthy and complicated. It comprises of many stages such as research and finding the property leading to property visits and then negotiating on the deal. The seller will then choose the best possible deal being offered to them which is followed by the closure process which can take up to weeks after adding in other negotiations and stipulations on the deal.
What properties being sold ‘as is’ entail are that the house will be sold off in the current condition. For the buyer there is usually property visits that interested investors make before moving into the property will be followed by a few requests. One of the most common requests to be made on the buyer’s end is that they will want repairs for this property. One of the most common implications of the property being sold as is would be that this option is not on the table
Following is a detailed explanation on buying properties in their current situation and the pros and cons of this situation.
Full meaning of Buying a property as is?
We already sated above that the ‘as is’ along the property listing will usually indicate that there will be no repairs being made from the seller’s end however another one of the conditions this makes for is that the seller is not claiming any status or conditioning of the house.
Home sellers in this situation will still have to a mandatory disclosure of any major faults in the property. Cases of improper disclosure can still be filed as the home seller is not completely removed from this responsibility. However, it essentially means that home owner is not going to do something about it and negotiations relating to these issues are off the consideration. These repairs are 100% going to be reliant on the buyer’s end.
Are ‘as is’ property listings trustworthy?
The first impression of such a term being applied on a property means that the home seller wants to let go of this property as soon as possible for them. This can lead the buyer down a road of doubt making them think that there must be some major flaws with this property that it is being presented in this way.
Unfortunately, due to the prevalent market scams where an acting home owner will sell the property of an overseas owner can make a person be doubtful. Although intentionally hiding any flaws in a property is unethical and fraudulent; if you missed something during the property visits; such situations can be quite arduous in the late run. To avoid such issues home sellers will put the ‘as is’ deal forward to avoid any extra hassle hiding major flaws of the property; however, such is not always true.
As we mentioned above that mandatory disclosure is still on the home seller to inform you thoroughly otherwise you can pursue legal action against them. it can be the situation of a home seller as in cases of they’re moving out in a hurry or simply do not have the finances to do repairs on the property themselves which lead them to selling the property under ‘as is’ stipulation.
Advantages and Disadvantages of these deals:
There are 2 sides to a coin. Especially in real estate any investment can be good or bad; it all depends on your case. Following are some of the brighter things about such deals and then some undesirable facts that you might have to face:
Speedy closure process:
For investors who are in a hurry to invest into a property might find ‘as is’ home sales quite appealing. People who are selling their house in the current conditions are mostly in a hurry themselves. Usually, a home’s process will include a few months’ process in between the potential buyer’s inspections and then following with the repair negotiations and the time taken to carry out the repairs. The signing of the property’s title is a process that can also take up an extra few week.
In homes being sold as is not only is the time required to carry out the necessary or negotiated repairs not taking up months; the closure process is also going to be quite speedy. This removes the long wait and hassle of closure process aside.
Such properties are priced lower:
Properties being sold in their current condition are priced a tad bit lower than the market standards to attract investors easily. This has the advantage for the property owner as such deals can potentially help them sell the property faster; on the other end for an investor of property; such offers are not seen every day.
For a property of that stature and appearance you wouldn’t find offered at such a low price.
Trouble getting financing or loans for such properties:
As is homes are usually properties that have some repair work to do. This repair work can range on quite a diverse scale. From needing minor repairs around the property to big and essential repairs needed to make the property functional for living. Depending upon how damaged or what condition this property is in; one could get in a difficult spot to get financial help. Mortgages and loans can be offered based on some conditions. If the house that is being sold as is does not meet the specified conditions, it get be tough to attract financial aid to pay for this.
On the bright side of this disadvantage when investing into such properties; the lower price tag can make it a bit more affordable for one to pay the cost out of their pocket.
The inevitable repair costs:
Properties being listed under ‘as in’ deals are usually homes that have been lived in. if you haven’t dealt with property that has been lived in before you will be shocked by how much natural wear and tear can take away from a property. Take into consideration the flaking, peeling or scratched off interior wall paints. The nudges and spills on the interior walls can go a long extent as well. While on the outside of a property the exterior paint being subject to harsh weather and seasonal changes can cause it to dull over time.
Take a view from the outside and damages to fences and gates can stick out like a sore thumb. The overgrown grass and weeds in a lawn can give off a displeasing look too. When it comes to functionality of the house it also poses a big challenge in repairs. The electricity, water and gas systems are quite essential in any household. Electrical outlets can be got faulty and might require minor rewiring, water pipelines might become rusted or blocked that need to be redone. For the wooden cabinets or floor tiles their condition can also degrade quickly in a lived-in home.
In normal real estate deals, you can put forth the demand for the homeowner to pay up for thee fixes; however, with the property being sold as is; this option is off the table. All these minor or major repairs must be paid by your pocket. These can add up quite some hefty expenses so make sure what you are getting into before investing in such properties.
A few tips before you sign the deal:
Following is some advice you can take to improve your outcome while investing in such deals.
Thorough inspection of property is necessary:
Even though the repairs on the property do not fall as a responsibility on the homeowner; you are still rightfully due to visit and inspect the property thoroughly. If you know what to look for during property visits, you can be good on your own however if you don’t; hiring an inspection agent might seem to do the trick.
Inspection contingencies can be important:
Inspection contingencies are the offers one can make with the homeowners in such offers. Now you can put forth a deal that if you find a fault or the repair costs overwhelming to handle in such deals… you can back out of the deal. This clears your way in falling for a deal that will ultimately put you at a loss.
Haste makes waste:
Even though some properties being sold as is form a deal that might seem too tempting… hasting in your investment can make you miss some important warning signs that might lead to a loss. Try to be patient and careful in any real estate investment.
We hope this article was informative for you!
If you will buy or sale your property contact us on https://ssconsultancy.com.pk/contact/ or Call us on +92-3-111-786-313