BrokerBryant.com: August 2012

"As Is" Always means MAYBE!

Florida Foreclosure

Hi folks. Today I want to talk a little bit about "As Is" contracts. A read an article titled "As Is" contracts mean maybe? I completely agree with the title but disagree with the content and most of the comments. The article is about a Buyer asking for repairs even though they agreed to an "As Is" sale. My disagreement is based on people stating that the buyers, because they asked for repairs, are:

  • Greedy
  • Not following the Golden Rule
  • Petty
  • Extremely Selfish
  • Raping and pilaging
  • Greedy little worms

OK enough of that. You'll just have to go read the post and the comments. I'm not making this stuff up.

Let's get back to the topic of what "As Is" really means and how we as agents can prepare our Sellers and Buyers to avoid issues later. First, I need to remind you that I am a Florida Broker. Your contracts and laws may vary. But whatever they are be sure to learn them. Look them up and read them. If you don't understand them then seek legal advice. 

In fact, if what I explain here is completely different than in your area come back and post the law or clause in the contract that's different so we can all learn. OK?

In Florida, "As Is" means the Seller is not agreeing to do any repairs and that the Buyer has the right to inspect and then can either accept the property or reject the property and get their deposit back. In most cases the Buyer will decide to ask for the repairs to be done or ask for a monetary compensation.

We have 2 different "As Is" clauses depending on which contract you use. Both give the buyer the right to inspect and cancel the contract. The one most commonly used is this one:

As Is Real Estate Clause

Now I don't know about you but if I were a Seller I would much rather the Buyer ask me for repairs than just cancel the contract. Wouldn't you?

The Seller also has an obligation in Florida to disclose as follows:

Florida Real Estate Disclosure

So we need to inform our Sellers at time of listing about disclosing everything AND make sure they understand the Buyers may very well ask for repairs even though it's an "As Is" contract.

When an offer is made it is our job to have the Buyer sign off on the Seller's disclosure. Basically what this does is tell the Buyer right upfront what's wrong with the property. If an issue is NOT on the disclosure and comes out during the inspection then the Buyer has every right to ask the Seller to fix it or give a cash credit.

So....."As Is" means to the Buyer, "As long as the inspection doesn't bring to light any issues that you haven't disclosed then we agree to accept the property in "As Is" condition."

"As is" to the Seller means, "Here's a list of everything I know to be wrong with the property. I am not going to fix any of these items. However if the inspection uncovers other issues we can negotiate."

Now if we explained "As Is" to our customer/clients like this wouldn't it make things so much easier? And isn't this a truer picture of what "As is" really means? I believe it is. What say you?

 

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Comment balloon 109 commentsBryant Tutas • August 23 2012 04:00AM
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