Home Selling Tips: What does "as is" really mean?
So what does selling your house as is really mean? I get this a lot from my sellers, "I'm going to sell my house as is. No repairs, no negotiations, take it or leave it." Well, guess what? The California Association of Realtors has an "as is" clause in the purchase agreement by default. So most homes that are sold here in California are "as is". But what does it really mean? Let's start with the negotiation part. What some sellers aren't aware of is that the buyer always has the right to negotiate, especially if there's a physical inspection contingency in place.
So let's say you're in escrow and the buyer does their inspections, which by the way, as a seller, I always highly encourage you to do your own inspections, but that's a whole other video I made, which you can watch at a later time. But back to my point about the buyers doing their inspections. Let's say it turns out the house needs $10,000 worth of repair, and the buyer is asking for either a price reduction, seller credit, or the seller take care of the repairs. "As is" doesn't mean the buyer is not allowed to ask for that. It simply means that the seller has a right to say no, they don't want to give any credits or make any repairs. Now, if both parties agree to the terms, that's fabulous, escrow can move on as normal. But if no agreement can be made, then the seller does have the right to cancel escrow, as does the buyer.
But does "as is" mean that the seller doesn't need to disclose any known facts about the property? Absolutely not. Anything that's known about the property, the neighborhood, or any nuisances that could affect the marketability of the home have to be disclosed by the seller, and by the way, by the agent as well. So what protection does the "as is" clause really provide to the seller? It basically lets the buyer know that the seller's making no warranties on the quality and condition of the home, and that is the buyer's sole responsibility to carefully inspect the home as long as the seller wasn't aware of any defects ahead of time. I hope this was helpful for what as is really means and how it can benefit you as a seller. Stay tuned for my next home seller tip.