by Broker Associate Sarah Ashton, Ashton Kirchner Group, Keller Williams Realty
In recent years more and more Real Estate contracts have been written up on an “As-Is” contract. Back in the day the Standard Contract for Sale and Purchase was the norm. The simplistic explanation of the difference between the two is that with an “As-Is”, the buyer of the property is assuming the responsibility for the current condition of the property and the seller is not obligated to make any repairs.
This sounds good for the seller, right? Contract signed now collect your check at the closing table, right? Not so fast. If, during the inspection period, the buyer, for any reason decides they no longer want the property, they may cancel the contract in writing, and get their deposit back. No harm, no foul – except that the property was off the market to other potential buyers during this Inspection period. Not so good for the seller. As is true with most property sales, keeping the contract together is the goal of both the buyer and the seller so the negotiations continue – even with the “As-Is”.
The use of this contract has become more the rule versus the exception and certain assumptions have arisen about how items identified during the inspections of the property are addressed. In many instances it is no longer presumed to be the buyers problem to fix everything identified in the inspection report. For example, if a previously unknown a leak was found in the roof or the hot water heater during the course of the inspections, the current owner – seller – would likely fix these items whether the contract stayed in place or not. In this type of instance, the seller might agree to pay to repair the item or the buyer and seller may elect to split the cost. What it comes down to for the seller is “Would you fix it anyway?”
The bottom line is that if the choice is cancelling the contract because the buyer will walk away if the repair is not made or fixing an item you would do anyway, then the rational seller likely will opt for fixing the item they would have fixed anyway.