Have you been hunting for a new house? Chances are, you’ve come across the term “as-is property” or an ad that says that a property is sold “as-is.” What exactly does this mean for you, the buyer?
Here’s a quick rundown about as-is property and some questions you need to ask before you buy one.
What is an As-Is Property?
When a home is sold as-is, it means that the seller isn’t going to do any repairs or cosmetic upgrades. As the buyer, this means that you will be getting the home in its current state and you will not be refunded in credits for any fixes or improvements you make to the property.
Does this mean that you should avoid buying as-is properties at all cost? Not necessarily.
Although an as-is property is also commonly called a fixer-upper, not all as-is properties have major structural damage or require plenty of cosmetic improvements. Sometimes, a property is sold as-is because the seller doesn’t have financial means to fund repairs or improvements. Sometimes, it’s because the seller doesn’t have time or isn’t physically capable of overseeing renovations. However, the as-is property can still be in great condition and wouldn’t really require a big overhaul like fixer-uppers do.
Questions You Need to Ask Before Buying an As-Is Property
Now that you know that an “as-is” status isn’t really a red flag, it’s time to find out whether buying an as-is property is for you.
Here are some questions you need to ask before buying an as-is property:
Has the house been professionally inspected?
It’s important to have the property professionally inspected so that you will know every single issue there is with the home. You need to know all the details so that you can calculate whether the property is worth it.
Can you afford the cost of necessary repairs?
Sure, the asking price for the property fits into your budget, but what about the cost of the repairs? When buying an as-is property, you don’t just consider the upfront cost, you should take the repair costs into account as well.
What makes it a better option compared to other properties that are not as-is?
Does the as-is tag mean that the property is sold for cheap and is therefore a huge bargain? Is the property located in the perfect neighborhood for you? If the property has something great going for it, then it might make it worth the effort, money, and time needed to fix it up.
Could this be a good investment?
If you’re looking to invest instead of buying a home for yourself, looking at as-is properties could be worthwhile. Here’s our guide on BRRRR Investing that could help you out.
As-Is properties might not be for everyone, but that doesn’t mean that you should automatically rule them out when looking for a home. To make sure that you’re on the right track, let our expert Houston realtors at The Ige Johnson Group help you out in the home buying process.