Buy Alexandria Real Estate: Are You Buying an "As Is" Home? Buyer Be Very Aware!

Alexandria Virginia Real Estate Blog

Are You Buying an "As Is" Home? Buyer Be Very Aware!

Caveat Emptor -- that's Latin for "buyer beware." 

In today's real estate market, with the prevalence of foreclosures and short sales, I would caution that this phrase should read differently.  Since I don't speak Latin nor know anybody else who does (even though I graduated from law school and there are even more Latin terms in law than there are in real estate), I'll write it in English.

Today's phrase is:


When you're buying a home, unless it's from a friend or family member, it is very unlikely that you know the seller of the home.  However, when you are purchasing a foreclosure home, you do know the seller!  It's Freddie Mac, Fannie Mae, Wells Fargo, Bank of America, or some other well-known banking institution.

Bank Owned Foreclosure

Banks are not in the business of selling real estate, but due to the foreclosure crisis, many of them have a large inventory of homes on the market.  Unlike a traditional seller, the banks do not know the condition of the property they are selling, and in most cases nobody from the bank has ever stepped foot in the house you're looking to purchase.

Banks are selling these foreclosure properties, "As Is."

While banks use their own addendums (or additional documentation for the real estate contract), the standard Regional Sales Contract for Northern Virginia and D.C. contains the following definition of "As Is":

"The Seller makes no representation or warranty, express or implied, as to the condition of the Property or any equiment or system contained therin.  The Seller will have no obligation to make repairs to the electrical, plumbing, heating, air conditioning, or any other mechanical system, equipment or fixture." 

In addition, this clause allows the seller to waive the following normal requirements:

  • Property delivered free and clear of trash and debris
  • Clauses pertaining to termites
  • Clauses pertaining to Private Well and/or Private Sewage Systems
  • Clauses pertaining to compliance with city, state or county regulations
  • Clauses pertaining to compliance with Property Owner's or Condominium Owner's Assocations.

Let me emphasize again, if you're buying an "As Is" Property:


However, this does not mean that you are blindly buying a home without taking any precautions.

Although you are purchasing a property "As Is" you still need to know what the definition of "As is" is (with deference to former President Bill Clinton's grand jury testimony).

You should always have a home inspection especially on a bank owned property!  Even though the banks won't necessarily fix anything or give any credit off the price for necessary repairs, at least you'll know what you're getting into with the purchase of the home.

The home inspection will enable you to find out the exact "As Is" condition of the property.  Once you are satisfied with the present condition is when you proceed with the purchase. If not, make sure the contract says that you can cancel the deal based upon the home inspection.  VERY IMPORTANT!

Even if you're not buying an "As Is" foreclosure property, I always recommend a home inspection.


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Comment balloon 51 commentsBrian Block • February 26 2010 05:12PM


Very good advice - always do a home inspection; I've seen major problems found even with houses that are 2 -3 years old. Thanks

Posted by Jim Curry, Realtor (Re/ Max Achievers) about 8 years ago

A few weeks ago, we had a listing agent say that the seller nor the agent had to produce the docs.


Posted by Lenn Harley, Real Estate Broker - Virginia & Maryland (Lenn Harley,, MD & VA Homes and Real Estate) about 8 years ago

Brian, this raises an interesting question.  If something goes wrong with some system between the time of the inspection and the time of settlement, does the bank have no responsibility?

And I used to be pretty fluent in Latin.  Catholic schools and all that.

Posted by Patricia Kennedy, Home in the Capital (RLAH Real Estate) about 8 years ago

Great Blog....worthy of a reblog!

Posted by Damon Gettier, Broker/Owner ABRM, GRI, CDPE (Damon Gettier & Associates, REALTORS- Roanoke Va Short Sale Expert) about 8 years ago

We all have to be recommending those home inspections, but especially for the banked owned homes.

Posted by Barb Szabo, CRS, E-pro Realtor, Cleveland Ohio Homes (RE/MAX Trinity Brecksville Ohio) about 8 years ago

Seems I have inspected one or two of those...

I thought Caveat Emptor means Beware Buyer.    ;)

Posted by Jay Markanich, Home Inspector - servicing all Northern Virginia (Jay Markanich Real Estate Inspections, LLC) about 8 years ago

There is a lot you need to be aware of when buying a foreclosure. It's always good to have a good attorney and Realtor to help you with these transactions.

Posted by Bill Gassett, Metrowest Massachusetts Real Estate (RE/MAX Executive Realty) about 8 years ago

Always have an, old, re-sale, distressed sale, REO. 

The buyer can never be too careful.  I see many "investors" & first-time buyers today competing to purchase homes and waiving the due diligence period to get their offer accepted.  If this is the only way that you can make the deal work, it's probably one that you should walk RUN away from.

Posted by Jenna Dixon, Empowers You With a Better Real Estate Experience (DRA Homes | Cobb County Real Estate ) about 8 years ago

Many REO buyers don't realize that a large portion of the "discount" they are receiving is to cover the risk factor they are assuming because of the lack of warranties or disclosures.  Certainly inspections...including mold and pest...should be a routine part of the purchase process to minimize, but not eliminate this risk they are assuming. 

Posted by Howard and Susan Meyers (The Hudson Company Winnetka and North Shore) about 8 years ago

The most frequent comment I hear from buyers is "why get a home inspection if the property is being sold 'as is'?" I suppose the justification may be that the $400.00 could be spent on repairs. How do Realtors handle that objection?

Posted by Joe Nernberg about 8 years ago

Excellent pionts that buyers need to be aware of; flippers are back in abundance (at least here in SoCal)  but first time buyers would never know the ins & outs such as you noted here especially pertaining to the MAJOR "bewares".  BTW - if you need help with your Latin, I can call my mother for you ;)

Posted by Connie Tebyani, Platinum Home Staging, Los Angeles and Ventura County (Platinum Home Staging, Inc. : RESA-Pro) about 8 years ago

Joe #10 - People need to have an idea of what the repairs will entail. Spending that $400 may result in walking away because the house had so many expensive defects, saving the buyer many thousands of dollars. And even with foreclosures and short sales with 'as-is' clauses, I've negotiated repairs for buyers on big-ticket items. I can't guarantee that, but you need the documentation of an inspection before you can even try that. Unless they plan to scrape the house, I strongly encourage inspection.

Posted by Joetta Fort, Independent Broker, Homes Denver to Boulder (The DiGiorgio Group) about 8 years ago

I enjoyed this post. The most important point you made was to be sure the contract allows an out if the inspection does not meet your standards.

Posted by Bob Sweazy (Prudential A. S. de Movellan Real Estate) about 8 years ago


Buyers should not be scared with "as is" properties if they have some good people representing them!


Posted by Ty Lacroix (Envelope Real Estate Brokerage Inc) about 8 years ago

Brian- Couldn't be better said!

Owner occupied sellers in my area have all gone to As-Is. Their attitude is, " Why should I have to fix things, when the banks don't fix things?I'm already giving my house away!"

No matter what you buy, you should do an inspection. You're getting ready to tie yourself to it for 30 years, you better love it because you won't be leaving it too soon!

Like them or not a Home Warranty may not be a bad thing to purchase on a bank owned property. Even if all that's left in the house is a water heater and an HVAC unit, that's still money you may have to spend while you are replacing everything else that's missing.

"You get what you pay for" is a scary reality.


Posted by Sanna K. Thomas, PA GRI, E-Pro, SFR, AHWD, LH Ocala Florida Luxury (Sellstate Next Generation Realty) about 8 years ago

Joe Nernberg; If the buyer is a "flipper" I tell them to get the inspection, because it will serve as input and will give you an idea to the cost of flipping.

In all the years of the thousands of inspections I read, only one or two uncovered major problems (foundation, etc.) which allowed cancellation. On the flip side, some inspectors failed to uncover serious issues, such as asbestos covered ductwork under the house, brick chimney separated from the house by several inches, etc.

In CA all purchase contracts are as-is. I explain to buyers that it means the seller, whether bank, individual, investor, etc. will not make any repairs, and they are buying it in its existing condition.

Posted by Peter Rozsa (Cupertino, CA) about 8 years ago

When in the buyer representive mode I have always insisted on an inspection. Sometimes I paid for it out of the commission.The risk of not doing it is much greater than the cost. I have seen  long and costly lawsuits that could have been  avoided by a thorough  inspection.

The key for the   realtors is" KNOW THE  INSPECTOR". Make sure the  inspector is up to the task and is tough. Especcially if it is an inspector you have no experience with. Be with the buyers.They like you to be around ,even if it is only for the last 30 minutes.

I know that many realtors avoid inspections .I do not ,and have been able to advise buyers to walk away from a very suspect " flipper house".I rather don't sell a house than being drawn in a case of very disappointed buyers and maybe even a lawsuit.

Posted by Everard Korthals, Lancaster real estate (Castellum Realty LLC. - International Real Estate Brokerage) about 8 years ago

More and more sellers are listing there properties for sale "as is." What does this mean to a prospective buyer? When a seller indicates that a property is being sold "as is," the seller is essentially offering the property on a take-it-or-leave-it basis.

Duty to Disclose

However, even with an "as is" clause included in the listing and/or real estate sale contract, a seller is not relieved from the duty of disclosing all known defects in the home. For instance, if the seller knows that substandard electrical wiring was used in the home and that the electrical wiring does not serve the purpose for which it was installed or presents a safety hazard, the seller has a duty to disclose such information to a potential buyer.

Why would a seller sell a property in "as is" condition? It may be that the seller wants to avoid a lengthy process of arguing with potential buyers over the necessity of small repairs before closing. It also may be that the seller does not know much about the property. For instance, a seller who inherited a property may know general information about a property, but lack specific information on important details. Lastly, in a real estate market where demand is very high, it may be that buyers will be less likely to balk at the prospect of buying a property listed for sale "as is."

For a buyer interested in a property offered for sale "as-is" one means of avoiding expensive surprises is to make the completion of the sale contingent upon a home inspection. Such a contingency clause would provide that the buyer could break the real estate sale contract in the event the home inspection reveals serious problems. The purpose of the home inspection is to uncover large, expensive problems, such as defective plumbing, a roof that needs to be replaced, or structural defects. With a thorough inspection by a competent home inspector, a buyer can rest assured that he is not taking any unnecessary risks in purchasing a property "as is."

Posted by Ernie Martinez (Eyeball Home Inspection Services) about 8 years ago

I'm also finding that some listing agents are using this term to avoid doing the actual work they are still required to do.

Posted by Karen Fiddler, Broker/Owner, Orange County & Lake Arrowhead, CA (949)510-2395 (Karen Parsons-Fiddler, Broker 949-510-2395) about 8 years ago

Always do the inspections.  And in this state they are supposed to disclose anything they are aware of, even in an "As is" sale, but I suspect they do not.

Posted by Gene Riemenschneider, Turning Houses into Homes (Home Point Real Estate) about 8 years ago

Home inspection and well/septic if need be.  CYA at all times.

Posted by Constantine Isslamow, "Training and Accountability" (Century 21 United Realty Inc. ) about 8 years ago

I bought an "as is" condo several years back!  Several things had changed from the time I saw it to the time we settled!  The Bank-Owner DID repair/replace the heat/ac / kitchen floor / walls!   All I did was take pictures and request what I wanted!  The first "repairman" did such a poor job, I took more pictures and they fixed it a second time!  Ask! Ask! Ask!

Posted by Kathy Opatka, Serving Ocean City, MD, & The Delaware Beaches (RE/MAX CROSSROADS) about 8 years ago

I am a Realtor from California and was taught that all listings are "as is" unless stated otherwise.  It is up to the buyer to submit the request for repairs on items discovered from the home inspection, HVAC, well/septic, and/or whatever inspections have been conducted. Unless agreed to in the contract, the seller is under no obligation to fix items discovered in the inspection(s). And incorporating the section 1 clearance in the contract has advantages and disadvantages as well. Depends on the seller, form of financing, etc. 

Posted by Karen Burns about 8 years ago

My understanding of As-Is properties is that when you make an offer As-Is then you are planning on buying the home with no repairs and terminating based on the home inspection is not always guaranteed unless the home inspection reveals something that was not previously disclosed or visibly obvious. In other words when you make an offer on an As-Is property it means you like what you see and you shouldn't count on the inspection to get you out of the contract. I agree - Definitely Buyer Beware when buying a home As-Is. I've written several offers on bank owned homes or As-Is properties and the home inspection is always helpful. Sellers/banks will often make repairs after the home inspection to satisfy lending requirements, but it often will require adjustment of the purchase price to cover the cost of the repairs.

Posted by John Cobb, REALTOR - Warner Robins Georgia Homes for Sale, Subdivisions, Foreclosures, Real Estate, New Homes (Fickling & Company) about 8 years ago

Ask for repairs--especially major ones.  They say they won't do them, but oftentimes they will to salvage the sale.  I've had them repair a major plumbing leak.  Get the inspection--then ask.  They can only say yes or no.  Buyer makes a decision following their response.

Posted by Margaret Hickman, REALTOR, GRI, ABR, SRS (Keller Williams Realty - Cenla Partners ) about 8 years ago

I always tell the buyers to get a home inspection. In today's market this is more important than ever. Even if the lender will not complete any repairs, if the home inspection uncovers a major problem, the buyer can cancel the contract based on the discovery.

Boulder City Steve

Posted by Steve Andrascik (Lake Mead Area Realty) about 8 years ago

I would never advise not getting a thorough home inspection especially in this circumstance. Nothing much is ever known about the home & even less will be passed on if it is known.  Good post.

Posted by Lyn Sims, Schaumburg IL Area Real Estate (RE/MAX Suburban) about 8 years ago

Always get an inspection and always negotiate the major items to be repaired. That said, even the good inspectors can miss things or disclose a problem that turns out to be something else. When buying a home the buyer needs everyone in his corner that he can find!

Posted by James Randall about 8 years ago

Always get an inspection and always negotiate the major items to be repaired. That said, even the good inspectors can miss things or disclose a problem that turns out to be something else. When buying a home the buyer needs everyone in his corner that he can find!

Posted by James Randall about 8 years ago

Good advice here. I had an international investor get an offer accepted the other day. I sent him the contact info for a few local property inspectors in the local area. He came back and told me he didn't need or want a property inspection. What can I do except give him the best advice I can? It's a buyer's choice as to whether they are going to have one done, but it's a bad idea not to.

Posted by Nathan Tutas, Your Central Florida Real Estate Expert (Tutas Towne Realty, Inc.) about 8 years ago

Just because it is as-is doesn't mean you can't have an inspection and do your due diligence to make sure you can live with those flaws!  I still try getting repairs on as-is properties though.  The worse they can say is "NO"


Posted by Renée Donohue, Las Vegas Real Estate Broker - (Savvy Home Strategies Realty, LLC-REALTOR®-Estate-Probate) about 8 years ago

Hi all...

Len's comment, "A few weeks ago, we had a listing agent say that the seller nor the agent had to produce the docs. Mmmmmm 

I have had that happen. The Seller/Agent says, "It was my income property, I never occupied it so I don't have to fill out a Seller's Disclosure."

I said, "Really? So you never had to do any repairs on it in the past 9 years? You didn't have a roof leak, a faulty air conditionner, or a hot water tank go out?" Aren't you lucky... hmmmm.

Always, ALWAYS, have an inspection, and give your buyers an "out" if the results are too great to take on.



Posted by Lisa Slaughter about 8 years ago

Hey Brian,


I like your social network tool at the bottom of your post. What do you use to make that?

Posted by Joe Manausa, Tallahassee Real Estate (Joe Manausa Real Estate) about 8 years ago

A home inspection should go without saying in an "As Is" situation. A few hundred dollars could save the buyer thousands as well as avoid a myriad of potential nightmares. Great post!

Posted by Risa Liebster, Toluca Lake Real Estate (Ramsey-Shilling Associates) about 8 years ago

Hey Brian,


I like your social network tool at the bottom of your post. What do you use to make that?

Posted by Joe Manausa, Tallahassee Real Estate (Joe Manausa Real Estate) about 8 years ago

A guaranty for sure...a home inspection always!

Posted by Celeste "SALLY" Cheeseman, (RA) AHWD CRS ePRO OAHU HAWAII REAL ESTATE (Century 21 Liberty Homes) about 8 years ago

I recommend buyers get property inspections on any home they purchase.  A home warranty is a must.

Posted by Kay Van Kampen, Realtor®, Springfield Mo Real Estate (RE/MAX Broker, RE/MAX Solutions) about 8 years ago

This is basic RE101.  Of course, buyer beware!

Posted by Jirius Isaac, Real Estate & loans in Kenmore, WA (Isaac Real Estate &TriStar Mortgage) about 8 years ago

With a home inspection, at least you know what you're in for and if it's something that will prevent the home from passing a municipal inpsection (reqired in some villages) then the seller needs to make good on that before a sale can go thru.

Posted by Lora "Leah" Stern 914-772-4528, Real Estate Salesperson (Coldwell Banker, 170 N Main Street, New City NY 10956) about 8 years ago

Hey Brian,


I like your social network tool at the bottom of your post. What do you use to make that?

Posted by Joe Manausa, Tallahassee Real Estate (Joe Manausa Real Estate) about 8 years ago

Hey Brian,


I like your social network tool at the bottom of your post. What do you use to make that?

Posted by Joe Manausa, Tallahassee Real Estate (Joe Manausa Real Estate) about 8 years ago

"As is" is not a bargain when it will cost another $30k to bring the property up to liveable conditions.  Funny how most people won't buy a shirt or dress marked down if it is missing a button or has a tear but they seem willing to purchase a home that has been abandoned for months without utilities and debris galore which could be hiding insects/rodents or germs at the least. 

Posted by Linda Landry (HomeSmart Realty) about 8 years ago


I view "as is" as a statement the seller is not going to fix anything.  Fine.  I also interpret "as is" to mean the buyer doesn't have to buy the place if he doesn't like it "as is".  This means he/she has the right to inspect the property and determine if "as is" is acceptable.  It's unreasonable for a seller to offer something "as is" without offering that recourse.  One other thought:  How can a property be realistically priced without knowing what "as is" is? 

It's a little unsettling that FNMA and FMAC properties are being sold "as is" and with lengthy addendums that strip the purchaser of many of his/her rights normally afforded them under standard, Realtor-generated agreements.  One recent Fannie Mae agreement precluded the purchaser from having a jury trial if a lawsuit erupted over the deal and had a provision for liquidated damages that said he/she would have to automatically forfeit $5,000.00 if they didn't close for any reason.  Onerous?  No, criminal.

Posted by Dennis Erickson, My Best..., Always! (Berkshire Hathaway Home Services Montana Properties) about 8 years ago

I have had only two buyer's refuse to do a home inspection.  The first only because he was a builder himself and did his own inspection.  The second did an inspection on a townhome that he decided to walk away from and then turned around and bought one down the street without a home inspection against my warnings.  He had many problems.

Out of curiosity, would anyone have their seller do a home inspection, and make necessary repairs and then market it as "As-Is" or do you think it would give off negative vibes even if disclosed in the Remarks that the inspection is done and repairs made..

Posted by Gary Pike (Better Homes and Gardens Real Estate Metro Brokers) about 8 years ago

GREAT advice.  So many buyers think they want a foreclosure property - until they actually see one! 

Posted by Karen Bernetti about 8 years ago

Hey Brian,


I like your social network tool at the bottom of your post. What do you use to make that?

Posted by Joe Manausa, Tallahassee Real Estate (Joe Manausa Real Estate) about 8 years ago

Geez, I thought all real estate was sold "as is".  This is a huge misnomer that buyers agents have polluted the minds of their clients.  If a seller wanted to replace a worn roof, he would have done so and in turn would be asking 20-30,000 more for the home.  He didn't, so you are buying the house as-is.  Get it?

This is no different from a REO property.  The lender is selling the home as-is.  There is one difference.  Buyers agents seem to recognize that they are going to get the big "speak to the hand" if they try to negotiate after the inspection.  More listing agents need to stand up for their clients and tell buyers agents the same thing.

Posted by Martin Kalisker, Professional Standards & Legal Assistant (Greater Boston Association of REALTORS) about 8 years ago

If one of my clients decides not to have a home inspection, I have them sign a statement saying that I recommended the home inspection and they have chosen otherwise.

Posted by Gerry Banister, MBA (RE/MAX Showcase Homes) about 8 years ago

Great point.  At HABITEC Home and Building Inspections, LLC, providing Home and Commercial Building Inspections in Nashville and Middle Tennessee, we offer an inspection specifically for the foreclosed home that is up for auction "as is, where is".  Please see the full explaination at:

And you are correct, buyer beware!

Thank you,

Richard Acree


Comments in this blog posting are the copyrighted intellectual property of Richard Acree, President, HABITEC Home and Building Inspections, LLC, and contributing members of the Active Rain Real Estate network, and are intended to educate and otherwise assist home owners, sellers and buyers, building owners, sellers and buyers, realtors, real estate investors, property managers, and lenders in the process of owning, buying or selling homes or commercial buildings.  HABITEC is a residential (home) and commercial building inspection company serving Middle Tennessee including Nashville, Brentwood, Franklin, Murfreesboro, Smyrna, Mt. Juliet, Hendersonville, Dickson, Belle Meade, Columbia, Spring Hill and more!  In addition to building inspections HABITEC offers Environmental Services for mold assessments, radon testing and water quality analysis.  Additional information about HABITEC can be found on our website at, or call 615-376-2753. 

Richard Acree is the author of the HABITEC Home and Building Inspections Blog and founder of the ActiveRain Group Tennessee Home and Building Inspectors.  All are welcome to join and see more blogs like this one. 


Posted by Richard Acree, Home Inspections - Nashville TN (HABITEC Home and Building Inspections, LLC) about 8 years ago

Good points Brian, most people do not read what is in those bank addendum's buyers have to sign.  The long and the short of it, the bank will sell the property to whom ever, when ever, and how ever they want.  thanks for the post.

Posted by Joey Remondino, Broker, GRI, E-Pro (RE/MAX Preferred Properties) about 8 years ago

I see this as a training issue.  It's our job to know how to protect our clients, and if we do not do a reasonable job towards that endeavor, we should be held responible.

Posted by Ray Garrett, Jr. (ZipRealty) almost 8 years ago