What You Need to Know Before Buying a House As-Is in Southern Oregon

As a home buyer in Southern Oregon, you may encounter real estate listings that include "as-is." This means that the seller is offering the property without any obligation to make repairs or offer credits for any problems with the property. However, before deciding, it's essential to understand the potential risks and benefits of buying a house "as-is," as well as best practices to protect yourself as a buyer.

The Entire Property Being Sold "As-Is"

When the entire property is listed and sold "as-is," the seller will not make any repairs or offer credits for potential home defects or grounds. This includes significant defects such as structural problems, leaking or faulty roof, Chinese drywall, active termite infestation or damage, non-functioning systems (HVAC, septic system, etc.), mold or mildew problems, and the presence of asbestos or other harmful materials.

As a home buyer, agreeing to purchase a property "as-is" is a serious decision. Sometimes, you may request an opportunity to inspect the parcel for informational purposes only, even though you have already contractually obligated yourself to purchase the property.

Specific Components of a Property Being Sold "As-Is"

In some cases, sellers may identify particular aspects of a home being sold "as-is," such as fireplaces, chimneys and flues, detached structures (sheds, garages, etc.), household appliances (washers, dryers, refrigerators, etc.), and swimming pools, spas, hot tubs. "As-is" in this situation refers to aspects of the property that may or may not be functioning but that the seller will not repair or change as part of the contract of sale.

Two Specifications: "As-Is, Where-Is"

When "where-is" is included, the seller indicates that the property must be accepted in its current location, effectively excusing potential locational faults. Examples include being in a flood zone, not zoned for its everyday use, or scheduled to be taken by a government by eminent domain, right-of-way, easement, etc.

For sellers, it's essential to specifically flag for buyers that the property is being sold "as-is." All "as-is" language must be included in writing on the actual contract. Failure to have the "as-is" terminology will negate any desire or intention of completing an "as-is" transaction.

For buyers, due diligence is an absolute must before entering into an "as-is" contract. This means consulting with an attorney, having a title search performed, examining the deed and land records for potential red flags, inspecting the property before offering a contract, including a provision in the agreement that allows for inspections and cancellation of the contract as a result of any inspection findings, commissioning a Wood Destroying Insect (termite) inspection in advance, and having a licensed contractor examine the major structural components of the dwelling.

Most residential real estate listings are not "as-is," and those listings often target professional investors and rehabbers with experience with such transactions. For a buyer not especially experienced in real estate, home contracting, or home construction, it often makes sense to skip an "as-is" purchase in favor of a less-risky purchase with more conventional terms. However, suppose you decide to proceed with an "as-is" purchase. In that case, taking the necessary precautions to protect yourself from potential issues is essential. This includes conducting thorough research, inspections, and consulting with professionals who can provide guidance and expertise. At the end of the day, the potential benefits of an "as-is" transaction may outweigh the potential pitfalls and expenses. Still, as a home buyer, protecting yourself and making a fully-informed decision is essential.

Whether you're a buyer or a seller, it's crucial to understand the implications of an "as-is" transaction and ensure that all parties are fully aware of what they are agreeing to. By taking the necessary steps and precautions, you can minimize the risks and make informed decisions that are best for your unique situation.

Suppose you're considering a home purchase in Southern Oregon or the Rogue Valley. In that case, working with a trusted real estate agent who can help guide you through the process and provide valuable insights and advice is essential. Contact us today to learn more about our services and how we can help you find the perfect home for your needs.