There’s a nifty little fail safe when writing an offer on real estate, the as-is with the right to inspect contract or the as-is with the right to inspect addendum. Depending upon what side of the fence you’re on, it’s generally meant as a form of protection for one party or another or possibly both. There are a variety of so-called “customary” contracts floating around this area so contracts, results, timeframes and even what is considered a defect may vary.
The Southwest Florida housing market is certainly different that it was a decade ago. The biggest change, of course, has been the amount of properties which involve some form of investor, lender or third party involvement. While most consumers hear the words “short sale” and “foreclosure” bandied about, they often haven’t considered the process for purchasing a property which may be in some phase of distress. It’s not until they get down to signing a purchase offer that they ask about the as-is clauses they’re reading.
The broad stroke of the brush tells us that in the last 30 days, slightly less than 20 percent of the real estate that closed sale was either a short sale or foreclosure. That doesn’t necessarily mean your neighborhood; it was an MLS-wide statistic so simmer it on down. Homes and condos sold short or foreclosure are sold as-is and the as-is contract or an as-is addendum are used to protect the sellers from incurring more costs and future liability related to the property and to protect the buyer by allowing them to purchase a property in as-is condition while providing them the opportunity to have it thoroughly inspected prior to proceeding with the purchase.
One of the first questions many consumers ask when purchasing a distressed property is, “What if there is something really big wrong with the property?” They often just hear or read the words “as-is” and the flight instinct wants to kick in. Purchasing real estate as-is is not a hostage situation. Very often, home inspections reveal exactly what they’re supposed to reveal, a few minor items not working in the capacity for which they were designed. Every once in a while there is a surprise discovery. That discovery provides the buyer the choice to continue with the purchase, fully informed, or to bail out of the transaction if the defective items discovered are far greater than they are willing to accept.
Naturally, there are usually time periods involved to perform the appropriate home inspections. During that time period, usually limited to a specific number of days, the potential buyer may also get second opinions from specialized contractors plus estimates or quotes for repairs or replacements of faulty items. The discovery and inspection process is very important. It protects consumers both financially and physically if repairs are needed to make the home safe if, for example, there are code violations or safety issues.
A real estate attorney is able to guide a buyer through any sale but they’re particularly skilled at protecting the consumer’s best interests and aiding in negotiating or even renegotiating a contract when there are unforeseen issues discovered in the inspection process. Yes, that’s a disclaimer. Call an attorney for advice and to help guide you through your as-is real estate purchase.
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Chris Griffith is a real estate agent at Downing-Frye Realty Inc. in Bonita Springs. If you have a question about local real estate or Bonita Springs, e-mail her at chris@LifeInBonitaSprings.com.