From time to time, I’ll have a potential home seller tell me that they will be selling a home as is in Missouri. What does that mean? Can you sell a home as is? What is on the Missouri Association Of Realtors Disclosure Form? So many questions! Let’s answer them!
When you are selling a home as is in Missouri, you are basically telling potential buyers two things. First, the seller is not obligated to make any repairs on the property, and Second, the seller is not providing any implied warranties on the property, most commonly related to the transfer of title to the property.
The Seller Is Not Obligated To Make Any Repairs
This gets very confusing for real estate agents and home buyers. While the seller is not obligated to make any repairs, you really never know if the seller is actually going to make repairs. For example, if a house languishes on the market for months, the buyer might include repairs as part of their offer to purchase. That doesn’t mean the seller will agree to this. And, this is the main cause of confusion, in my opinion. The phrase “as-is” gets thrown around all the time, but an offer to purchase can be conditioned on pretty much anything.
The Seller Is Not Providing Any Implied Warranties On The Property
This tends to refer to the transfer of title. As an example, there are different types of deed instruments to transfer ownership from the seller to the buyer. The weakest of deeds is the Quit Claim Deed, and the strongest type of deed is the General Warranty Deed. Can you see where the word warranty gets used in the type of deed and how it might be confused for some other type of say, Air conditioner warranty? It’s ok, happens all the time.
Does As-Is Mean The Seller Will Allow Inspections On The Home In Missouri?
For the most part, you’ll see a line in the listing that says something like “seller will provide no inspections, warranties, etc. “ And so, if you’re like me, that would seem to indicate that it means no inspections. Depends on what inspections we’re talking about. Will the seller provide a title inspection? No. It says so in the line above. Will the seller allow you to hire your own inspectors? Yes. And you should! God only knows what’s wrong with a house listed for sale As-is
Can You Sell A Home As Is in Missouri?
Of course you can! And don’t assume that you have to sell a home as is without a real estate agent. You can still use a Realtor, and although I’m totally biased, I think that’s the best way to approach an as-is property. I say this because if there’s so much confusion in just the term as-is, can you imagine working with potential home buyers and sellers who have no idea how to move forward?
Common Misconceptions Of An As is Sale In Missouri
There are many misconceptions of an as sale, let’s go over a few of them
- If the property is being sold as is, it means the property is junk.
This is an incorrect way to approach an as is property. As a home buyer, you have no idea of the condition of the property, the reason for selling a home as is in Missouri, or really anything other than the asking price and what you’ve seen inside the home on a walk through.
- Since the property is being sold as is, and it’s junk, I should offer far less than asking price.
If you actually want to buy a house, going around and offering thousands less because the property is being sold as is while other buyers are offering more is a bad strategy. When a house is new to the market, and there’s 30 people at the open house, do you really think that is a good idea? Here’s where your error is. You are making the assumption that there will be no negotiations after you have your property inspections. As long as you have an inspection contingency in your offer to purchase, you should just follow those steps and negotiate accordingly. While you may feel like the property deserves less due to it’s as is status, that isn’t necessarily what other buyers may think.
- Because the property is being sold as is, the sellers will make no repairs on the property.
Well, they may or they may not. Let’s say you’ve agreed to purchase an as is property with an inspection contingency and you’ve found a problem with the property. Let’s say that you’ve found that the sewer has a crack in the basement. When you give notice to the seller, ask for a credit or a price adjustment to take care of the issue. The seller can choose to agree to a credit, repair, or the contract is dead. Be wary of buying a home without an inspection clause.
- If we sell a home as is, we don’t have to disclose anything
That’s false, at least in Missouri. Now, as a seasoned real estate broker, I’ve seen every sort of attempt to not disclose something, and I’m pretty sure my sellers have lied to me at times over the years. This doesn’t mean that I like it, or that I tell my sellers to lie. Let’s just go over one instance where you’ll get a disclosure on a Missouri Association Of Realtors disclosure form that will be worthless. Let’s say a person has died and given the property to their children. The children may never have lived in the house. What could they possibly accurately disclose about the property?
- As is properties are only for investors
This is word play. As is can be associated with houses that need major repairs, and I suspect it’s because institutional sellers tend to sell property as is. Banks, for instance, usually sell foreclosures as is. This doesn’t mean that you’re going to get a deal. In fact, I’ve seen many foreclosures go for prices higher than surrounding homes due to demand and the misperception that there is a deal to be had. It depends on what the repairs are. Regardless, don’t assume an as is property is only for investors when someone is selling a home as is in Missouri.
- What about when a listing says something like the roof is as is or the detached garage is as is?
This comes up quite often. What’s really happening here is that the seller’s agent is indicating that offers to purchase the property should be conditioned on the possible repair of the roof or garage in this case. Let’s say a house is worth 100,000 to you. Then, you see that the garage is going to need lots of repair, and the seller has indicated that the garage is to be sold as is. Your offer should be given with the consideration that the garage may need repairs or replacement. Let’s just say it needs 10,000 in repairs. Your initial offer should be 90,000. Just know that some other buyer may think it only needs 5,000 in repairs, offers 95,000 for the house and you don’t get it. As is in this case isn’t referring to the deed type but it does refer to repairs. Confusing? Absolutely. Is it likely to change anytime soon? No.
What Does It Mean To Sell A Home As Is?
If you are a homeowner considering selling your home, you may be tempted to sell your home as is. I don’t understand why you would want to do that. There are many negative perceptions about an as is home in the marketplace that directly affect the types of offers you are likely to get. None of these perceptions are going to get you more money for your house. With something as simple as the Missouri Association Of Realtors Disclosure Form, you want to be honest and upfront with known issues. That is the best policy. Also, why limit your pool of buyers to go as-is?
As you can probably see, there is a lot of confusion about selling a property as is. This confusion is an area where experienced real estate agents and investors can really take advantage of home sellers. While it can be hard to find a Realtor, don’t let that stop you when you are looking to sell. Work with an experienced Realtor and tell them about your concerns. If you’re a homeowner who’s lived in and maintained a home for years, there’s really no reason to ever list your property as is. However, there may be some instances where it makes sense for you. Your expert Realtor can help you with that decision.