If you are looking for a new house in Lexington, South Carolina, you’ve probably seen listings that state “For-Sale-As-Is”. This is letting you know that the owner is not planning to make any repairs or renovations to the house.
Typically, an “as-is” listing is priced lower than other similar homes on the market, which makes them highly attractive. While you might be tempted to jump on one of these deals, be sure to weigh the financial ramifications of buying an “as-is” house.
Is it risky to buy an “as-is” house? We’ll explore this question below. When you decide you’re ready to buy, work with the Lafayette team at EXP Realty. We work with a variety of buyers and can help you find your perfect home.
What is an “As-Is” Houses?
Typically, when a homeowner puts their house up for sale, they are open to making repairs and/or renovations. The required repairs are typically determined via a home inspection. After the inspection, the buyer and seller will negotiate and then the agreed-upon repairs will be made.
On the other hand, if a homeowner lists their house “For-Sale-As-Is”, you’re getting the house in whatever condition it’s in. You can still have a home inspection just like you would any other home. However, the seller will not be willing to negotiate repairs.
Determining the Cost of an “As-Is” Property
If you are considering purchasing an “as-is” home in or near Lexington, South Carolina, its important that you understand the financial implications of going through with this type of deal.
First of all, you need to know that there will be additional expenses. Typically, “as-is” homes are priced lower than comparable homes in the area because the seller is not investing any money into repairs and wants to sell the property as quickly as possible.
As the buyer, you should not assume this means that you’re getting a bargain. If you purchase an “as-is” home, you will have to invest in the home inspection and then repairing any defects. It’s difficult to predict how much repairs will cost, which is why you need to have an inspection done prior to purchasing an “as-is” home.
Another issue you might want to consider is how you plan to pay for the property. Often, banks are hesitant to loan money on a home that is in poor condition. After all, banks use the property as collateral for the mortgage loan and if it’s in bad condition, they may reject the application and you’ll have to come up with the funds on your own.
Risks of Buying an “As-Is” Property
If someone is selling a home “as-is”, there’s a reason. Typically, there’s a defect with the property that they don’t want to fix- so they lower the price to entice buyers.
When you purchase an “as-is” property, you accept the risks that come with it, the primary one being that you have to do the repairs yourself. Depending on where you are buying the home, you may not be able to rely on a seller’s disclosure to tell you what you need to know. Many states put the responsibility on the buyer to determine any issues and take it up with the seller.
Another risk of purchasing an “as-is” property is that you may not be aware of the true value when you make the purchase. Knowing the value of a property before you purchase is important because it helps you decide whether it’s worth the investment. However, since an “as-is” home is usually not in the best condition, you can’t be sure whether you’re making a good financial decision or not.
Tips for Purchasing an “As-Is” Property
Below are some tips from the Lafayette Team at EXP Realty for purchasing an “as-is” home.
Home Inspections
Purchasing an “as-is” home does not mean that you cannot have inspections. As a buyer, you should make sure there’s an inspection contingency in your contract. This will let you know if there are any hazardous conditions and allow you to budget for repairs so that you can determine if it’s worth the investment.
Hire a Realtor
Since there are so many risks associated with purchasing an “as-is” home, you should only do so with the help of a realtor from the Lafayette Team with EXP. We can help you appraise the home based on the location and the after-repair value. Plus, you can negotiate better when you have a realtor in your corner.
Request a Home Warranty
One way that you can save money on future repairs is to ask the seller for a home warranty. This will cover certain appliances and important home systems. This will come down to your ability to negotiate with the seller and having a realtor can help.
Should You Buy an “As-Is” Property?
Buying an “as-is” property is a great way to get a property at a lower cost than other properties in the area. Of course, the drawback is that you will likely have to spend more to fix the issues.
It is not recommended for first-time home buyers to purchase an “as-is” property because most of the first-time buyer programs don’t cover homes with major defects. An “as-is” property is a better idea for real estate investors because they provide you with an opportunity to get a fixer-upper cheap and then quickly flip it.
The Lafayette Team with EXP Realty is successful and knowledgeable and can help you determine whether buying an “as-is” property is right for you. We work with first-time home buyers and first-time home sellers and would love to help you find your dream home in South Carolina.