What is an AS IS Provision?

The AS IS provision (or clause) is typically found in most real estate purchase contracts

It’s important for home buyers to understand the “AS IS” provision. Each local real estate market is different.   How the AS IS provision is written into the real estate contract to purchase (or Sales Agreement) is a very important provision for buyers to understand.

 Related: What Does Cash Only Mean When Buying Real Estate?

” ‘As Is’ denotes that the seller is selling, and the buyer is buying an item in whatever condition it presently exists, and that the buyer is accepting the item “with all faults”, whether or not immediately apparent. This is the classic buyer beware situation, where the careful buyer should take the time to examine the item before accepting it, or obtain expert advice.” ~~ Wikipedia

With our local standards of practice*, the AS IS provision is clearly written in the Sales Agreement we prepare on behalf of our buyer clients.

It reads:

AS-IS“: Except for Sellers’ express written agreement and written representations contained herein, and seller’s Property disclosures, if any, Buyer is purchasing the Property “AS-IS,” in its present condition and with all defects apparent or not apparent.”

“As Is” Does Not Mean “As If”

What is as is

Buyer repair requests can be / may be negotiated with the sellers, even with an AS IS clause — but that’s another topic for another post.

The AS IS provision DOES negate the buyers from making claims of them not knowing they are buying a property AS IS. In other words, a buyer can’t say “I didn’t know I was buying the property AS IS.”

Real estate in real life example: The AS IS topic came up recently when a buyer emailed me the following:

“This seems to be a bad faith negotiation, in my opinion, constituting an “as is” stipulation without making that clear at the onset.”

Hmmmmmmm . . . the AS IS provision was quite clear on the onset of us preparing the offer for submission. It is language that is written into the Sales Agreement and is mutually agreed when the contract is fully executed between Buyers and Sellers.

The AS IS provision DOES NOT negate the rights of the Buyers to have the property — or any components — fully inspected

When the offer (Sales Agreement) is written, it takes over an hour for me to discuss the contents of the contract with my buyer clients. I go over the language, explaining what it means. Each important topic is discussed and what the provisions mean is explained.

The “As IS” does not remove the inspection contingency.  A buyer should, and must, insist on a home inspection clause.  Just because the seller may not want to perform any repairs, and the buyer is purchasing “As Is” . . . as is does not mean that a buyer has to accept the property condition “as is” —

Buyers should always have a right to inspect the property!

Buyers should always be able to revoke the contract based on condition — as is, or not.*

The AS IS clause is always discussed in detail, or should be, in a real estate sales contract.

Please pay attention.*Consult with a Realtor® in your area for local standards of practice.