What is an “As Is” residential real estate sale or purchase? In Silicon Valley, we have 2 sets of purchase agreement forms with are normally used (though of course others could be used): the CAR (California Association of Realtors) and the PRDS (Peninsula Regional Data Service). Both have either the default or the option of an As Is sale.
But what does that mean?
An As Is sale means that the seller makes no warranties about the condition of the property and promises nothing upfront, at contract acceptance, about any repairs being made or credits being given for repairs prior to close of escrow. In other words, what you see is what you get (thinking back to Geraldine Jones / Flip Wilson) – no promises that the seller will fix anything.
Here’s what the CAR contract says (in part):
In other words, the property will be maintained but not improved prior to close of escrow.
What about negotiating after inspections or new inspections? The As Is clause does not preclude a buyer later asking for repairs or credits. However, if presale inspections were available, it’s presumed that the As Is includes whatever was already disclosed. Surprises, however, are often negotiated (though not always). For instance, if a buyer does inspections and find that there are $20,000 worth of important repairs which were not previously disclosed, it’s very likely that this buyer will ask for repairs or a credit on all or part of what was discovered.
The seller in an As Is sale is not obligated to do any repairs, but the buyer may walk, that is, the buyer may back out of the contract and get the deposit back as long as it is prior to the property condition contingency being removed, and any inspections which have been done must later be passed on to the next buyer – so there is some pressure to try to work with the current buyer.
If the seller says yes to the request for repairs, the buyer is then to remove all contingencies and close.
What if the seller says no? In that case, the buyer has a choice: buy anyway or cancel the contract and get the deposit back.
How often do As Is buyers ask for concessions, repairs or credits? In my experience, most buyers will not ask for any changes to the terms of the contract unless there are surprises which are either “big ticket items” (expensive) or related to health and safety. If the seller has had ALL presale inspections done, there should not be any surprises or any new requests for repairs or credits. But if all inspections haven’t been done, any surprises are likely to result in a request for some sort of remediation. (All in all: about half the time.)