What Does It Mean To Sell “As-Is”

Implied Definition

When you market a property as-is, you are implying that you will not negotiate with the buyer to fix or address anything, and the buyer should be prepared to take on the full risk of the property in its current condition. The buyer should agree to take the property in the condition it is in at the time of offer, without any inspections.

As-is doesn’t always mean the property has problems, sometimes it just means the seller wants nothing to deal with anything during the transaction, but sellers should understand that marketing a property as-is implies that there’s likely problems with the home and the market will usually price it accordingly.

Technical/Contractual Definition

In Northern Virginia’s Contingencies/Clauses Addendum you’ll find a section for selling “as-is” which contains the following terms that can be individually selected for the contract:

• Seller will not clean or remove debris. The standard is for the property to be free of trash/debris and broom clean.
• The seller is not responsible for addressing any wood destroying insect/termite issues. The standard agreement requires the seller to pay for any damage from wood destroying insects.
• The seller is not required to fix any Homeowners Association violations related to the physical condition of the property.
• The seller is not responsible for providing working smoke detectors.
• The seller is not responsible for compliance with notices of violation from local authorities.

It’s important to differentiate between marketing and communicating that a property is being sold as-is and actually selling it as-is using the proper contractual clauses to do so.

Who Uses As-Is?

It is common to see estate sales and homes that will be the targeted by investors (tear downs or flips) being sold as-is. In the case of many estate sales, the family member(s) who inherited the property may not live nearby, know anything about the condition of its systems, or want to be bothered by negotiations after a deal has been made.

Understand Your Choice

First and foremost, it’s important for a seller to understand the message they’re sending by marketing a property as-is. Most buyers will infer that the property has issues that will be passed onto them and will discount the value of the home accordingly. In many cases, I talk to homeowners whose home is in good condition, but they want to sell as-is simply because they don’t want to deal with inspection negotiations, repairs, etc. In this case, marketing a home as-is probably is not the right approach and a better approach would be communicating your expectations up-front with a buyer, without calling it as-is.

For buyers who come across an as-is sale, it’s important to ask the right questions. You’ll want to learn precisely what the seller’s intentions are with an as-is sale. For example, will they allow a pre-offer inspection or a void-only inspection after contract? Do they intend to address any HOA violations? Make sure that you are pricing/discounted the value of the home based on the seller’s actual intention and not based on your assumptions.