Buying a Home “As-Is” – Foreclosures and More
Buying a home “as-is” can be very tempting, especially in a seller’s market like Calgary is currently experiencing. Low supply and the price point can be factors that drive people to these kinds of properties. A CREA blog covers the risks and rewards of buying a home this way, so let’s break it down.
So, what is an “as-is” home? It is a property that is being sold exactly as it is, with no warranties or representations on the condition and with no repairs or improvements to be made before closing. The terms in the purchase contract which protect the buyer are gone – no real property report, the warranty/representation clauses are gone and the offer usually has to be unconditional. On possession, there is no guarantee of what condition the property might be in, appliances could be removed, as an example.
There are a few reasons why a property may be sold “as-is”, most commonly foreclosures but also land-value only sales and estate sales. Some of the pros are, they can allow buyers to enter the market at a price they might not otherwise find. Many of these properties are vacant so allow for a quick closing as well. “As-is” is also appealing for those who are handy and can handle many of the potential repairs/renovations themselves.
On the flip-side, there are cons and cautions to purchasing this kind of property. I ALWAYS recommend having a home inspection and you won’t have the opportunity to have one with an “as-is” so you won’t know the deficiencies OR the dollar amount it would require for any repairs. Especially if there is any sort of structural issue, it can be costly so not knowing what you could be taking on is definitely a risk. As the article says, “essentially, what you see is what you get, but what you don’t see is also what you get.”
Despite the attractive price point, you really need to consider the risks when it comes to these kinds of properties – the potential stress, headache and price tag might just be too much. I’m there for every step of your buying journey and don’t forget to connect with me on Facebook and Google for all the latest in what’s going on in the Calgary real estate scene!