What Does “AS-IS” Really Mean?

February 25th, 2008

In the Oakland Berkeley real estate marketplace it is not uncommon to see “As-Is” referenced in the advertising remarks. In my opinion the As-Is term is used a little to often. The meaning of As-Is really depends on where you are in the sales transaction.

Before an offer is accepted (the Marketing period) As-Is means that the Sellers believe they’ve priced their house with its deficiencies in mind. In other words, they know the house isn’t perfect and they’ve priced it accordingly.

After an offer is accepted (but before a Buyer has removed their inspection contingency) “As-Is” equals = “As-Disclosed.” If a Buyer makes an As-Is offer and the Seller accepts it, the Buyer can still get out of the deal without penalty under their inspection contingency protection. Let’s say a Buyer while doing their home inspections find out that the foundation is deteriorated to the point of needing replacement. This damage was not disclosed/provided to the Buyer prior to their offer being accepted. This new information may make the Buyer rethink their desire to purchase the property. If their inspection contingency is still in place the Buyer has three choices 1) request cancellation of the contract and a refund of their deposit. 2) Accept the defect and move forward with the deal anyway 3) or they can renegotiate with the Seller by requesting a credit or price reduction.

Once all Buyer contingencies have been removed As-Is means that the Buyer has satisfied themselves as to the total condition of the property and by their own accord they are choosing to close the deal.

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