Your Rights When Buying a Home “As Is”
If you’re trying to buy a home in California, you know how tough the real estate market can be. According to the California Association of Realtors, the average price of a single-family home in Southern California in 2022 ranged from $740K to $845K. However, if you’re flexible and open to buying a house “as is,” you may have more options than you think. That said, there are certain benefits and drawbacks that you’ll need to be aware of beforehand. Specifically, you should work with a real estate attorney to understand your rights when you buy a house “as is.”
If you’re in the Santa Ana, California region or anywhere throughout Southern California including Orange, Los Angeles, and San Diego Counties, contact me at Martinez Law Office, Inc for trusted legal help.
What Is Buying a Home As Is?
When a home is listed in “as is” condition, it means that the buyer must accept the property as it currently stands and the seller will not make repairs or offer credits on the bid, even if a home inspection reveals serious issues. Sellers choose to sell as-is for a number of reasons, and it doesn’t automatically mean the house will be falling apart. For example, if a seller is on a short timeline, they may do this to speed up the closing process. Alternatively, the seller may not have the funds to cover any requested repairs, or they may have had to move unexpectedly and the house is in the middle of an unfinished renovation. A seller may also list only a certain portion of their property “as is,” such as a garage or fireplace.
Benefits of Buying a Home As Is
There are both benefits and drawbacks to buying a house “as is.” Knowing these ahead of time will help you decide if this is the right choice for you. Buyers who go into this process with all the facts are better prepared and will be able to take advantage of these unique offers. “As is” houses tend to be much more affordable than regularly listed homes, so you can often secure a home in a good neighborhood for far lower than the median sales price. If you’re handy or have the additional funds to make any needed repairs, this may be a good choice for you. Additionally, buying a home in as-is condition usually means a faster transaction time, meaning you can close on the home and get to work faster than with a conventional purchase. Lastly, since most homebuyers will want to buy a home that’s move-in ready, you may have less competition.
Drawbacks of Buying a Home As Is
Of course, buying an as-is home also comes with some very real drawbacks. The most obvious being you may not ever fully know the extent of damages or defects until it’s too late. This can be true even if you get a thorough inspection, because some issues may not show up until later. Another real concern is obtaining financing for these purchases since many conventional loans, FHA, USDA, or VA loans aren’t available for homes deemed “defective.” If you aren’t able to pay cash for the property, you’ll have to secure funding through a renovation mortgage or personal loans.
Your Options & Rights
Each state sets its own regulations on what disclosures sellers need to provide to potential buyers and this is true for as-is homes as well. California has some of the strictest rules surrounding this, which means that you are still entitled to some disclosures. The best way to understand how this will affect your specific purchase is to work with an experienced agent who’s well-versed in real estate law in addition to working with an attorney. You may also see a listing that has an “as-is, where-is” provision which generally means you will have even fewer rights and may have fewer avenues of recourse. As always, you should consult with your lawyer and your real estate agent about all potential purchases since the language will vary in each instance.
Steps to Take When Buying a Home As Is
If you’re considering buying an as-is house, your first step should always be to hire an experienced real estate attorney and an agent. Because of the potential pitfalls involved in a sale like this, you’ll need professionals on your side who can thoroughly evaluate all the contract documents. You’ll next want to line up a home inspection, conduct a title search, and inspect the deed, all of which will mean out-of-pocket expenses but are essential to this process. Lastly, you’ll need to make sure you’re able to insure the home and you may want to consider purchasing a home warranty as well.
Get the Answers You Need
Buying a new home can be an exciting experience, but also one that’s not without its complications and obstacles. At Martinez Law Office, Inc in Santa Ana, California, you’ll gain a trusted partner whose only goal is to look out for your best interests and ensure you get the right home for your needs. Reach out to me today to get started.