Date Posted: 2012-06-19 11:20:53
Site Posted: Myproperty.ph
When a property is sold ‘as-is’, it means that it is put up for sale with little, even no renovations or repairs to fix any damages. A person interested in investing in real estate may be drawn to the fact that as-is houses cost less than ones in good condition, but the fact remains that what their getting is a house that may or may not need major repairs.
Who sells as-is properties?
Most of the time, people who sell their homes exactly as they are are people who are trying to do a short sale, or those whose houses have been foreclosed. People who are short selling feel that it wouldn’t be worth doing any renovations, since they won’t really be directly benefitting from it. Houses for sale that have been foreclosed, on the other hand, have been taken by the bank and are sold off only for the purpose of quickly getting back part of the mortgage the owner still owes, so they won’t waste time and money repairing anything.
How terrible is ‘terrible’?
When a seller declares that he is selling his home as-is, it frees him from obligation for the actual condition of the house. Whoever buys the property will basically be taking a risk, since the seller doesn’t have to fix anything or declare any minor or major repairs the place may need. The only way that you can find out how bad the property is is to get a professional home inspection. Remember to choose a home inspector who is not recommended by the agent who is connected to the property so that you’ll get a fair assessment.
Is it worth the risk?
Buyers may think that they’re saving money at first, but depending on how dilapidated a property is, it can end up costing them more in the long run. You have to take into account how much repair services and materials cost. It would be great if you have the money to rehab the property so you can sell it or rent it out to a tenant later on. Either way, it’s a good way to make money, but again, only if you have the funds to do so.
If you’re decided on buying an as-is property, be sure to know what the risks are, and if you’re ready to face them. Start with a home inspection to determine the actual condition of the property and go from there. If you feel like it’s something that you can’t handle, it probably won’t be worth gambling on, so it would be better to walk away.
Jillian Cariola, Writer
(cover image by Bjorgvin Gudmundsson)
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