As-is Sales and what they actually mean

[Tony Freeman]

As a new investor, especially in the world of multi-units, I'm sure you have come across a ton of buildings that are being sold "as-is" and are required to write that into the offer that you send over. Although it seems pretty straight forward that when you agree to an as-is sale, you are taking it in whatever condition you get it in and won't get any credits or repairs, but its not always that black and white. In fact, a lot of the as-is deals that I've been apart of on the buy side, we were able to get some form of credit still. 

Now, this doesn't mean that after your inspection, you send out a long laundry list of things to the sell side and expect them to accommodate everything because that 10 times out of 10 just won't happen. In fact, you have to be fully prepared to potentially not walk away with any repair or credit no matter how extensive it is but every seller is different. However, the things you can usually ask credits for while under an as-is sale, are typically things that can be potentially hazardous that you wouldn't have seen or known about until you got through the inspection. 

The most common credits I see people ask for are when it is as-is has to do with the roof, the foundation, or a deck(if the property has one.) Even when an issue with those things come up during the inspection, you still have to be mindful that you are under an as-is sale. Any kind of credit you can receive would be good step but I never recommend going in and asking for the full price of the repair or replacement or at least if you do, don't keep your hopes too high that they will give the full credit. 

Lastly, please do not be bullied into feeling like because you signed the as-is that you have no leg to stand on when asking for a credit or repair. A lot of sellers and listing agents will try to make it feel that way but as long as you have a great attorney and agent that can explain things to the opposing side and they can paint the picture to them, you have a higher chance of walking away with something. 

[Joe Splitrock]

Originally posted by @Tony Freeman:

As a new investor, especially in the world of multi-units, I'm sure you have come across a ton of buildings that are being sold "as-is" and are required to write that into the offer that you send over. Although it seems pretty straight forward that when you agree to an as-is sale, you are taking it in whatever condition you get it in and won't get any credits or repairs, but its not always that black and white. In fact, a lot of the as-is deals that I've been apart of on the buy side, we were able to get some form of credit still. 

Now, this doesn't mean that after your inspection, you send out a long laundry list of things to the sell side and expect them to accommodate everything because that 10 times out of 10 just won't happen. In fact, you have to be fully prepared to potentially not walk away with any repair or credit no matter how extensive it is but every seller is different. However, the things you can usually ask credits for while under an as-is sale, are typically things that can be potentially hazardous that you wouldn't have seen or known about until you got through the inspection. 

The most common credits I see people ask for are when it is as-is has to do with the roof, the foundation, or a deck(if the property has one.) Even when an issue with those things come up during the inspection, you still have to be mindful that you are under an as-is sale. Any kind of credit you can receive would be good step but I never recommend going in and asking for the full price of the repair or replacement or at least if you do, don't keep your hopes too high that they will give the full credit. 

Lastly, please do not be bullied into feeling like because you signed the as-is that you have no leg to stand on when asking for a credit or repair. A lot of sellers and listing agents will try to make it feel that way but as long as you have a great attorney and agent that can explain things to the opposing side and they can paint the picture to them, you have a higher chance of walking away with something. 

 I am not sure how you consider it bullying when you sign a contract "as-is" and then someone asks you to honor the contract? Buyers should not sign "as-is" contracts if they plan to try to negotiate later. That is the entire purpose of sellers offering a property as-is. They want best and final offer up front, not a buyer that plays games. You should have your buyers spend more time inspecting the property, so they are considering that in their offer price. It is kind of crappy to the seller because they could have found a different buyer who was willing to abide by the terms of the contract. 

Your job is to advise buyers up front "as-is" means no concession. If you are setting the wrong expectation up front, you are creating this conflict. Any contract can be renegotiated with both parties approving the changes, but the idea that a seller should be happy when you are backing out of a contractual agreement is unreasonable. Your perceived bullying is really just a natural response to bad faith contract negotiation on the buyers part. If anything, you are bullying the sellers by holding them hostage with threatening to breach the contract. What you are recommending here is not a good business practice and it is bound to get you a bad reputation with other realtors.

If there is an extreme deficiency found or some type of problem covered up, I am on board with opening a renegotiation. This should be the exception and not the rule.