Buying a house “as is” might be a fast track to the dream of homeownership, but the unknowns that may come with it can become a nightmare. Levi Kushnir, president of Stable Holdings, based in Valley Stream, says there are some things people need to know before making that purchase.
The main advantages of buying a house in its current condition are that the price will be lower than other houses that are in better shape and there are fewer people interested in the house. “You’re not going to have to compete with the typical bidders over how much you want to pay for the home,” he says. “There is way less competition.”
However, Mr. Kushnir says, the disadvantages of buying such a house are the quick turnaround time and the unpleasant surprises the homebuyer may face. “When you buy a house as is, there are going to be unknowns, and the seller may be anxious to sell and is usually pressed for time,” he says. “You won’t have the time to apply for and secure a traditional mortgage.”
When people look to buy a house that is in less-than-perfect condition, they believe they are buying for the same reasons as a “fixer-upper,” but Mr. Kushnir says that is not the case. “With an as-is house, the seller is usually in some sort of situation and needs to sell the house quickly,” he says. “With a fixer-upper, the owner may just sell the house because they gave up on doing the renovations themselves or the contractors took too long. In either case, the house would need significant repairs.”
Mr. Kushnir says that, by law, the seller should disclose to the buyers of any lead paint in the house, as well as any structural or other problems with the house, according to the Property Condition Disclosure Act (PCDA). “The PCDA requires the seller to list anything that may be defective with the property prior to closing,” he says. “Should it be discovered that it was not discussed and resolved prior to closing, it is possible the seller may be held liable for damages incurred by the buyer.”
To avoid such legal problems, Mr. Kushnir says, the seller will offer a $500 property disclosure credit. “By doing this, the seller can completely avoid having to go through the process by trying to list every single possible defect there may be with the home, thus avoiding a lot of liability or recourse,” he says.
Finally, Mr. Kushnir says, when ordering an inspection on an as-is house, some sellers may not even allow this. “Should you be allowed to, do not expect any price reductions or any credit at closing for any problems or defects found at this inspection,” he says. “This inspection is solely for the purpose of the buyer knowing the ins and outs of the property, but it is likely that if you nickel-and-dime your seller, he will see that you are not a real as-is buyer and will refuse to deal with you.”