What You Need To Know About "As-Is" Properties
When you look for inexpensive real estate, the phrase "as-is" may catch your eye. If the ad has pictures, you might not think that an as-is property is really that bad, but seasoned commercial real estate buyers and sellers will tell you otherwise. If you're new to buying any real estate, be wary of this phrase because it can contain more surprises than you might realize. That doesn't mean you should avoid these properties, however, as you do have some protections under the law.
This Does Not Eliminate the Duty to Disclose
An as-is property is one where you buy it in its current state. The seller will not make improvements or fudge on the price if you see undesirable qualities in the property that you want to change. The benefit of finding these properties is that they can be a lot more affordable upfront, even if you have to spend money to fix them up. However, they can have some real problems, too.
One thing to keep in mind when you buy these properties is that the as-is condition does not mean the seller doesn't have to disclose items that the law requires them to. For example, if the house was the scene of a death that resulted in a stain on the carpet and the state mandates that sellers disclose there was a death, the seller can't hide that history. Listing it as-is may allow the seller to sell the property in that condition, and it may become your responsibility to replace that carpet if you don't want to see the stain, but the seller still has to tell you what happened before you buy the property.
State-Mandated Liability Still Applies, Too
Also, certain conditions remain the responsibility of the seller to an extent after the sale. If the property is situated over a known toxic groundwater plume, the state may require not only a disclosure but also an assessment and action on the part of the seller to mitigate the problem (to the seller's ability, of course; for example, a seller can't really clean up a toxic groundwater plume themselves, but they can improve the ventilation in the buildings on the property to reduce buildups of gases from the plume).
Levels of Experience Affect the Expected Sales Approach
If you're new to buying property and you find a very bad issue after buying, you could have legal recourse even with an as-is property. Courts often look at the experience the buyer and seller have in disputes over real estate so experienced sellers can't take advantage of inexperienced buyers. That help may take a while to receive, but at least you have the option if you find, for example, that the seller rushed you through the purchase process in order to prevent you from finding out about additional steps you could take to make a sound decision about the property.
Working with a commercial real estate agent helps new buyers avoid a lot of the pitfalls associated with as-is properties. While buying on your own may seem simple at first, the amount of paperwork and regulations can quickly become overwhelming — to the point where you might miss something important. A seasoned commercial real estate agent can guide you through the process and help you find the best deals.
To learn more, contact a commercial real estate agent.