As Is Isn’t Always
Originally appeared in Hills Publications, Oct. 8, 2004 and ANG Newspapers, Sept. 25, 2004
Repairs on a home are often a point of negotiation in a purchase contract. The continuing, competitive market in our area has caused many buyers to accept properties “As Is” even when they have not been listed as such.
Multiple bids, four offers
Five failed previous offers had left a young couple disappointed and frustrated. When their agent mentioned a home that was on the market over a month, they became more optimistic.
After viewing the house and feeling it would work for them, they wrote contract number six. Unfortunately, three other couples had the same idea. Despite multiple offers, and having learned from previous rejections, they bid high and it was accepted.
As a condition, the seller’s agent insisted the buyers sign a long “As Is” addendum, full of not often seen legalese. Undeterred, they signed. Thus began the next, stressful stage of their home buying journey.
Few reports, many problems
Consistent with a majority of homes for sale, the seller’s only inspection was a termite report. In fact, he had two because a buyer who backed out had ordered his own structural pest control inspection.
Not surprisingly, the two reports had different quotes for repairs. More significant were the numerous items that recommended “further inspections.” This meant neither told the full story, i.e., the damage, and cost to repair it, was much greater than stated in either one.
Due to the lack of meaningful information, and the onerous “As Is” addendum, the buyers’ agent urged them to have comprehensive inspections of all the major systems, including a third termite report.
When all inspections were complete, the total for repairs was almost $60,000. The termite report, with all areas now covered, was over $26,000; the lowest estimate for a new roof was $14,000; electrical work to correct dangerous conditions came to $6000; foundation and framing issues added another $13,000. None of this included upgrading or remodeling; that would be in the future.
A list of such expensive problems would have been ample reason for many buyers to withdraw, but not this couple! They loved the house and were encouraged by their Realtor to negotiate in spite of the seller’s apparent resistance.
Compromise is reached
After discussing and considering all options with their agent, the buyers instructed him to open a dialogue with the seller. They decided to continue with the contract only if the seller agreed to pay for at least half the repairs. To this end, they wrote a personal letter to him carefully explaining their position.
Having already prevailed over three competing bids, they knowingly put themselves in a precarious position by asking the seller to share the cost of repairs. They never would have paid such a high amount, however, had they known the extent of the damages.
After many days of arduous deliberations, the seller finally agreed to pay half and the escrow closed. The buyers’ advantage was that their agent had extensive experience in handling just such a situation.
It is often not easy, but there are times when a seller will pay for deferred maintenance even if it was not his initial intention. This is more likely, as in this case, when the property has not had pre-sale inspections. A knowledgeable Realtor will help you determine when “As Is” isn’t.
As Is Pointers, Part 1
As Is Pointers, Part 2
Home Inspections, Part 1
Home Inspections, Part 2
Not Just Termites, Part 1
Not Just Termites, Part 2