House Inspection in As-Is Properties for Sale
Some prospective homebuyers forego professional house inspection when buying as-is properties for sale because the sellers are not obliged to make repairs anyway, so prospective buyers would just depend on their own home inspection.
But the as-is sales condition should all the more prod prospective homebuyers to conduct professional house inspection. There could be serious conditions in the homes that are not immediately visible and are not noticed by the homebuyers because of their inexperience or their excitement in finally buying a home.
In a typical as-is home purchase contract, the buyer accepts the current condition of the house as of contract date, home inspection date or settlement date. The seller does not make any guarantee concerning the physical condition of the house, the appliances in the house and other systems inside and outside of the house.
The contract also specifies that the seller has no obligation to repair any defect in the electrical, mechanical, plumbing, air conditioning or heating systems of the house.
The only thing required in as-is properties for sale is the good working condition of smoke detectors. This requirement also depends on current regulations in states where the as-is property is located.
Based on real estate data, most distressed homes available in the market are being sold under the as-is sales condition. Even banks are selling many of their real estate-owned properties or bank-owned foreclosure homes under the as-is condition.
Also, because many banks do not have property maintenance departments, they turn off the utilities of their distressed properties to winterize them, putting prospective home buyers in a dilemma of whether to take the time and effort to de-winterize the properties to conduct a more thorough home inspection or just leave the matter to chance.
In the conventional as-is sales contract, the seller is not obliged to have the utilities turned on so that a complete house inspection could be carried out.
On the other hand, a home purchase sales contract with a house inspection contingency means that the completion of the home sale will depend on the result of the professional house inspection, which includes radon contingency inspection in many contracts.
The contract states the deadline of the house inspection and also specifies that the utilities are turned on during home inspection.
After the house inspection is carried out, the seller and the buyer or their agents negotiate about defects detected during inspection. Both buyer and seller have the right to cancel the contract if they cannot agree on what is to be done after the house inspection.
