What Do “As Is” Home Sales Mean?

There’s seems to be some confusion about what the phrase “as is” means in practical terms in a real estate sale.


You’ll see “as is” with an increasing number of listings on the MLS as more and more homes are hitting the market either as short sales or as REO sales.

Here’s what an “as is” typically means in actual practice: the seller will not make any repairs to the property nor will the seller credit the buyer at closing for physical problems that may be uncovered during the home inspection.

So your analysis as a buyer is very simple: if a home has been neglected and the listing says “as is”, you’d better plan on handling repairs at your own expense after the closing when you are the owner.  (There are ways to finance repairs; Section 203K loans are a good avenue to explore with certain ‘as is” sales.)

To help clear up what seems to be widespread confusion about what an “as is” listing entails, here’s a review of what an “as is” sale does NOT entail in Massachusetts:

1. “As is” does not relieve home sellers of the obligation to truthfully reply to buyers’ questions about what the sellers knows about the home. 

2. “As is” does not relieve listing agents from complying with Massachusetts  laws requiring an agent to disclose to buyers information the agent knows about the property that might reasonably be deemed to be material to a buyer’s purchase decision making.  Note that with bank owned homes (REO sales), the bank (and hence the listing agent) rarely knows anything about the property, so you’d best perform a lot of buyer due diligence with bank-owned homes.

3. “As is” does not prohibit buyers from inserting a home inspection contingency into a purchase offer.  Home inspections can be conducted and sale agreements may be terminated pursuant to a home inspection contingency, just as with any other home purchase.

So with an “as is” listing, by all means get a home inspection.  Just understand that “as is” typically means the seller will not undertake repairs, so if your inspector finds expensive defects, you’ll most likely have to terminate, get your deposit money back and move on to another home.

Here’s a complication with REO (bank-owned) sales: often during the cold months of the year, the homes have been“winterized” (water and utilities turned off, water pipes drained and often filled with anti-freeze.)  So there is no way to do a complete home inspection without “de-winterizing” the home and then re-winterizing it again once the inspection is done – a very expensive proposition that lenders frown upon (if not outright bar) and thus not very practical.

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