This 8-week series, How to Find the Perfect Home for You and Your Budget, will show you how your next home can match your wants, needs and, most importantly, your budget. There’s no reason you can’t dream big with this next purchase, all the while working within your budget. Even though you may feel more financially secure if you plan to use funds from the sale of your current home, moving up to a new home requires some self-evaluation of what’s next, a mortgage strategy to make it affordable, and then putting it all together for a successful purchase of your “perfect” home.
For this last week, we examine what it means to deal with an “as is” home and if it’s something you should pursue.
Are youtransfixed watching episodes of your favorite HGTV shows where they fix up homes that need a ton of work and turn them into a beautiful home sweet home? Maybe you are thinking you’d like to do that for your next home.
Many times these fixer upper homes are sold “as is.” But it can be hard to tell if an “as is” listing will be a money pit or has the potential to be the perfect home for your budget in the end.
There are huge differences in the conditions of “as is” homes, so in this article, my goal is to help you better understand “as-is” homes when it comes to real estate purchases. That way you can decide if those are homes that you’d like to consider.
“Fixer upper” homes can sometimes be a good deal budget-wise, especially if it gets you into a neighborhood you’ve been eyeing. However, some “as is” homes come with more troublesome issues that could cost you more in the long run.
Even though you have experience as a homeowner, it’s a completely different experience fixing up and living in a home that isn’t “move-in” ready. It’s important to make sure you are ready to take on an “as is” home for your next purchase, especially one that might require lots of work.
If you do make an offer on such a home, you need to take certain steps to protect yourself. Here’s how:
Understand What “As Is” Means
Basically, “as is” means the buyer will purchase the home from the seller in its current condition no matter what since the seller has no intentions to do any repairs to the property before they sell it.
The home could be in pristine condition or it could need a complete renovation.
Know What’s Expected from Sellers
Every jurisdiction has different laws when it comes to “as is” homes, and every home and every seller has their own story. You’ll need to be more of a detective if you want a complete picture of an “as is” home.
Understand disclosure requirements for different jurisdictions. Arizona requires sellers to disclose any defects they know about in a home for sale.
If sellers know of something but didn’t disclose it, that is considered fraud and the sellers would be liable. Sometimes it is difficult to prove if sellers really were aware of any defects or questionable conditions.
That’s why it is important to get any disclosures in writing to protect you in the long run from fraudulent information.
Take cautious steps if the seller is a non-occupant. If the property was owned by someone who didn’t live in the home recently—whether it was a landlord who had been renting out the property, an estate selling for a deceased family member, or even a bank in a foreclosure sale, they can’t disclose something they don’t know about. So be more vigilant since there could be more wrong with the property than what has been disclosed.
How to Protect Yourself
Take additional steps to ensure you understand the true condition of a home, both apparent and “hidden.” That way you’ll have a better idea of negotiating and budgeting for this home.
Make sure you get a qualified inspector. If you included a home inspection contingency in your offer (which you always should, especially with an “as-is” home), you are given a window of time to get the house inspected.
That way you can get a thorough idea of the home’s condition. Does it have a leaky roof, any water damage, serious foundation issues, pest or termite history?
The results will help you decide whether you will continue with the transaction or not. You can walk away if you aren’t comfortable with buying the home.
Get bids from contractors. If there are necessary repairs to be made, contact contractors during this contingency period to have a better idea of future costs.
These estimates could help you at the negotiating table to bring down the price of the home.
Take It, Or Leave It
Overall, an “as is” home could be a good deal as long as you take the proper steps to protect yourself. It could be the “perfect” home for you as long as you do your due diligence on your part and have a very thorough inspection by a professional.
You’ll also want to completely understand what you’re getting yourself into if it is a home that will need lots of work. Honestly ask yourself if you will have the time, the commitment, the patience, and the budget for undertaking any major repairs and making it more livable to your standards.
But remember that you can “take it or leave it” and that’s the beauty of it. If you’re not comfortable, then you can always walk away if you’ve included the right contingencies in your offer with the seller.
I hope you have enjoyed my 8-week How to Find the Perfect Home for You and Your Budget series.
Here’s a recap and link to the previous seven articles:
- 12 Questions to Ask Yourself Before You Ever Start Looking at Homes — Before you do anything else, you must evaluate you wants and needs for a home with some self-analysis.
- Are You a “House” or “Location” Person? — Buyers tend to lean one way or the other, and by knowing this you can streamline your home search either way.
- The 3 Steps Most Buyers Skip When Buying a Home — You don’t want to mess up one of the biggest financial decisions of your life so don’t forget to do these 3 things.
- How to Finance Your Home Purchase — This backwards way of determining your budget and price range is something I recommend to all clients.
- Putting It All Together — Here’s how you can learn to balance your budget, location, and criteria so that you do get the “perfect” home for you.
- What You Need to Know About Buying for Schools – Here’s how to navigate “buying for schools” or “good schools” if that’s a top priority in your search for your next home.
If you are thinking about buying your next home, I’d love to help you find the perfect home for you and your budget. I want you to have everything you’ve ever wanted in a home and I’d love to help you find it!
If you or anyone you know is struggling with finding a new home within their budget, I can help. There are so many great ways to find a home that doesn’t break the bank, especially if you also have to sell a home.
I'm Brooke Taylor and I love helping first-time homebuyers and sellers make their real estate goals a reality.
Let me know how I can help you make your real estate dreams come true!
1307 E Southern Ave. #101
Mesa, AZ 85204
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