Question Re: Property Description - as is where is

[LJS]

Hi,

My realtor has sent me a property listing with the following in the Property description:

Please Note* Purchaser to confirm all details, including sizes, fees or any information pertaining to this property to their satisfaction. This property is sold "as is where is".

I am not sure what the statement actually means. What should my concerns be or is this an opportunity?

LJS

 

[coinebro]

QUOTE (LJS @ Apr 17 2009, 10:04 PM) Hi,

My realtor has sent me a property listing with the following in the Property description:

Please Note* Purchaser to confirm all details, including sizes, fees or any information pertaining to this property to their satisfaction. This property is sold "as is where is".

I am not sure what the statement actually means. What should my concerns be or is this an opportunity?

LJS

 

[Thomas Beyer]

QUOTE (LJS @ Apr 17 2009, 11:04 PM) This property is sold "as is where is".

I am not sure what the statement actually means. What should my concerns be or is this an opportunity?
"as is where is" means that there MAY BE deficiencies, there MAY BE structures on the property that are illegal or non-conforming, that the property MAY BE old and MAY HAVE hidden defects. It means the seller is selling the house as is without any warranties and as such you, the buyer, assumes all risks.

Your job as buyers is to find these "MAYBE`s" .. and if there are any to assess if the purchase price is in line with these deficiencies.

For example:
a) seller built a shed that is illegal. You have to tear it down.
b) seller built a deck that encroaches onto neighbor`s property and you have to reduce the deck.
c) pipes in basement leak
d) boiler doesn`t work
e) roof is leaking
f) windows don`t close property and on a windy or rainy day water seeps in
g) property is too high/too wide/too long and as such no modifications will be tolerated should you chose to add a dormer or extension
h) there are termites
i) there is mold
j) there is non-confirming structural work hidden behind the drywall
k) the electric wiring that was added 12 years ago is non-conforming
l) the plumbing is about to explode when temperature drops to below -10

etc. ...

The issues may be severe or may be minor. Thus, the PRICE needs to reflect these possibilities. Hire a property inspector to find out, and get a letter of compliance from the city .. THEN decide if the price is right for the list of deficiencies.


The ONLY clause in the contract you need to walk is:

"Property purchase is subject to inspection satisfactory to purchaser, on or before ___________ (date)."

That`s it .. if the inspection find just one tiny issue you can decide to walk ..

Give yourself at least 3-4 weeks to do these inspections .. more if city is involved.

A common knowledge always helps, of course !!

 

[LJS]

Thanks for the information. I will due my diligence.

 

[Thomas Beyer]

QUOTE (LJS @ Apr 18 2009, 11:44 PM) Thanks for the information. I will due my diligence.
right .. you mean: "you will do your due diligence" ?

as is, where is is OFTEN done with older properties .. as even the seller often doesn`t know what is potentially wrong with a property he may have lived in for 12+ years ..

do you homework .. then decide if the price is right .. as a low enough price is the cure for most deficiencies !

 

[LJS]

Thank you for correcting me. I will do my due diligence.

This property is not old, Year built 2005. My realtor has informed me that it is a foreclosure, thus the "as is where is", so the bank does not make any representations on the condition, size, appliances etc.
The price is very low compared to other properties in the same complex. If the property is worth pursuing, I will get a property inspection and condominium doc review. I have no prior experience with buying a foreclosure property so I am not sure how much lower the bank will reduce the price if there is deficiences such as missing appliances, property damage etc.

Any tips on buying foreclosures would be appreciated!

 

[seven3]

A follow up question - what happens if the house is currently occupied and we buy "as is where is", after subjects released the occupants completely trash the place?

Is is realistically enforceable that the house is in the same condition as of the XXX date we viewed it?

What I`m concerned about is significant change in condition after the inspection.

 

[gwasser]

QUOTE (seven3 @ Oct 4 2009, 12:44 AM) A follow up question - what happens if the house is currently occupied and we buy "as is where is", after subjects released the occupants completely trash the place?

Is is realistically enforceable that the house is in the same condition as of the XXX date we viewed it?

What I`m concerned about is significant change in condition after the inspection.

I would like to point out that the term `As is, where is" is extremely dangerous since it lets everyone even your own realtor of the hook regarding any defects or issues related to the property. You better make very sure that there is not any nastyness ranging from environmental contamination to hidden cracks of the basement floor or code violations associated with the property because you are on the hook, buddy!

Hope this helps.

Godfried

 

[GarthChapman]

If you are only really concerned about the physically visible condition of the property, you could write it something like this (yes I actually did this once on an offer):

"as is where is, as at this date xx/xx/xx, and as shown by the following photos taken this date xx/xx/xx".

 

[RedlineBrett]

QUOTE (LJS @ Apr 17 2009, 11:04 PM) Please Note* Purchaser to confirm all details, including sizes, fees or any information pertaining to this property to their satisfaction. This property is sold "as is where is".

I am not sure what the statement actually means. What should my concerns be or is this an opportunity?

LJS

It`s another way of saying "take it or leave it". Almost always this term is included when sellers don`t want to be nickled and dimed at inspection time when their old ratty properties come back with deficiencies. You can still walk, just don`t expect the seller to do anything to bring up the condition of the property.

If it`s listed on the MLS the seller would have had to sign a listing contract. In Alberta this contains provisions to notify potential buyers of any defects that the seller knows about that a prospective buyer wouldn`t be able to find through a non-invasive home inspection.

Doesn`t mean you can`t try though... but you should enter into this deal with the expectation that the seller will not do anything to the property prior to you taking possession.

You can insist on vacant possession with a term like Garth uses as posted above. If the seller doesn`t want to do anything then say that you will serve the notices yourself and just set your possession date to after the tenants are to be moved out.

 

[Mike Milovick]

"As is where is" means no representations by the seller. Think bank sale or estate sale - as the party selling the property does not have personal knowledge of the property. In our Board, Kitchener-Waterloo Board - these are the only two situations where this description is allowed.

With Bank Sales, expect a fine tuned offer (drafted in bank`s favour, of course) that reduces liability on behalf of the seller (the bank). As such, without the representations of a normal seller, you should expect to pay a discount from market - as you are undertaking more risk...

Mike



QUOTE (LJS @ Apr 18 2009, 01:04 AM) Hi,

My realtor has sent me a property listing with the following in the Property description:

Please Note* Purchaser to confirm all details, including sizes, fees or any information pertaining to this property to their satisfaction. This property is sold "as is where is".

I am not sure what the statement actually means. What should my concerns be or is this an opportunity?

LJS

 

[gwasser]

QUOTE (MikeMilovick @ Oct 8 2009, 04:56 PM) "As is where is" means no representations by the seller. Think bank sale or estate sale - as the party selling the property does not have personal knowledge of the property. In our Board, Kitchener-Waterloo Board - these are the only two situations where this description is allowed.

With Bank Sales, expect a fine tuned offer (drafted in bank`s favour, of course) that reduces liability on behalf of the seller (the bank). As such, without the representations of a normal seller, you should expect to pay a discount from market - as you are undertaking more risk...

Mike

I did some internet research and found the folowing on http://www.calgaryinvestmentrealty.com/foreclosures.htm

"Property sold as is. When you write an offer on a foreclosure you must sign a schedule A form. This form specifies that you are waiving your right to litigation if you take possession of the property and it is not in the same shape it was when you originally viewed it. It also specifies that lender or court makes no warranties or representations that anything in the property functions as it should. As well, none of the chattels ( fridge, stove, etc) are sold, conveyed or transferred with the property. The property is sold "as is, where is" and there is no guarantee that you will get a survey or Real Property Report."


This is also what I understood of the term: You give up the right to sue no matter what problems you encounter.

As such, it scares me to even consider a property thus denominated because you may discover a problem that requires much deeper pockets than anticipated or worse than you can afford. And once you found such a problem, which was probably hidden when you bought, you will be forced to sell the place. Including the obligation to disclose that problem to potential buyers (that is real estate law). Consequently you will likely sell at a big loss.