With apologies to Bill Clinton.
My firm sells a wide range of properties: upscale 7 figure estates right over to a $7500 trailer. Among our niches is the area broadly described as the distressed property market. This could vary from short sales to bank owned foreclosures to property that is owned free and clear but in poor shape. The latter category could be an estate home or a house that sustained fire damage. Westchester has tons of pre-war builds, and we never seem to run out of this inventory. It is often a very good opportunity.
Virtually all distressed property, especially bank owned and short sales, is sold “as is.” Even a neophyte buyer seeking something they can fix up can deduce that if they want the fixing done before they buy that it really isn’t a fixer upper anymore.
With the new year and new freshman class of buyers entering the market, the definition of “as is” appears to be subject to a nuanced interpretation that challenges the meaning of the word “is.” A contributing factor to this trend is a pool of licensees who say they are buyer agents but seldom do more than unlock doors and act as carrier pigeons for uneducated buyer clients they do not have the intestinal fortitude to advise.
If you seek to buy a distressed home sold “as is” that means that you are buying it subject to much of the following:
- Code violations
- Old open permits
- Non conforming work, such as illegal baths, decks, or additions
- Environmental issues like mold, radon, and submerged oil tanks
- Shag carpeting
What you see is what you get. So look carefully.
Another inclusion of “as is” is the precept that the buyer’s questions on possible changes to the property, such as additions, demolition and rebuilding, and other types of restoration, are their responsibility. The “buyer agent” should accompany their buyer to the building department and get answers. Asking the listing agent is not due diligence, and can land you in hot water if you skip doing your homework on behalf of the client. Get down to White Plains, Yonkers or Chappaqua and pull that property file at the building department. It is your job.
The ironic side of this particular issue is that many offers are accompanied with reassurances and oaths from the agent that their buyer is experienced, savvy and been around a while. Oftentimes, it is quite the opposite- the buyer is buying their first inventment, possibly getting money from family members, all of whom offer well meaning but misinformed advice, filling the vacuum of their agent’s input.
I should conclude by saying that this is not a rant; I am the listing agent and get the sale no matter who buys. However, from where I sit, I see people lose deals left and right because they don’t know the rules of engagement. It is ironic, that the agent often doesn’t want to rock the boat by saying inconvenient truths, but that agent can eventually lose the client after months of running around when the buyer gets frustrated that they are not getting their intended result.
The takeaway for agents is that you need to do your due diligence and not rely on the listing agent. You also need to advise your client on everything, even the uncomfortable things.
For consumers, “as is” means just what it says, what you see is what you get, and asking for more can leave you out in the cold.