As-Is: To Buy Or Not To Buy? That’s The Question.

Buying an "as-is" property can be a good opportunity, but it also comes with risks. Here are six important questions to ask before considering buying an as-is property:

What does "as-is" mean in this context?

Understanding the specific terms and conditions of the sale is crucial. It typically means the property is being sold in its current condition, without any repairs or warranties. The seller is not willing to make any repairs. You can negotiate a 10-day due diligence period where, at your expense, you can complete any inspections. These may include, but are not limited to, home inspections, well water tests, septic inspections, wood-destroying insect inspections, and radon testing. This can get pricey, especially since you are now responsible for some inspections that in a traditional process the seller would cover, such as the wood-destroying insect inspection. If you are not satisfied with the results, you have the option to withdraw your offer within the designated timeframe.

Are there any known issues or defects?

Ask the seller to disclose any known problems or defects with the property. Keep in mind that Virginia is a Buyer’s Beware state. Refer back to your Summary of Residential Property Disclosure Act for a list of the things that the seller does and does not have to disclose.

What repairs or renovations are needed?

Create a detailed list of necessary repairs and renovations, and obtain estimates for the cost of each. This will help you assess the total investment required. The home inspector will be able to provide you with estimated costs on most items. If additional trades professionals are needed to provide an estimate, there may be additional fees charged by these professionals.

Is the property insurable?

Check with insurance companies to see if they are willing to provide coverage for the property. Some properties with extensive damage may be difficult to insure.

Am I able to get financing on this property?

Depending on the lender and the type of loan, as-is properties may not be eligible for financing. Be sure to check with your local lender prior to exploring these properties.

What is the market value of similar properties in the area?

Research the local real estate market to determine if the asking price for the as-is property is reasonable considering its condition. Your trusted real estate professional can help with this. Don’t forget to consider repair costs.

Remember, buying an as-is property can be a great opportunity, but it's important to do thorough due diligence to understand the risks and potential costs involved. Consulting with a real estate professional or real estate attorney can also provide valuable guidance in this process.