What does the term "As-Is" really mean?


What does the term "As-Is" really mean?

The term "As-Is", is one of the most misused terms and real estate. Mostly because no one including the realtors understand exactly what it is. As a licensed agent I'm seeing this form used less and less in transactions. For the most part the only time I see it is with bank owned properties, foreclosures or short sales.

In the state of Minnesota licensed real estate agents as well as sellers have a duty to disclose any and all information about a property that's for sale. This includes foreclosures, no one gets a pass on this. Typically because banks have never lived in the property they don't know its history. But if something happens while the own the property they have a duty to disclose that to potential buyers. They typically will add an addendum with the terminology that the buyer is purchasing the home "as is" with no implied warranties. This does not mean they still do not have a duty to disclose any knowledge they have of the property.

What an "as is" addendum is truly for is to spell out the condition of a property between the time you purchase the home and the time the sale closes. A perfect example would be this, when you have an inspection the furnace is working, you get to the day of closing the furnace is broken. If you sign in as is addendum, the seller does not have to fix that item in order for you to move forward with the closing. If they know that the furnace is broken they still have a duty to disclose it to you.

Either way the sellers of a property have the duty to disclose any and all material facts to you. But that does not mean the sellers have to make any repairs. This could include water intrusion as well as a myriad of other problems. The best advice is if you are presented with an "as is" addendum, before you sign it speak to a real estate attorney who can inform you of your rights.