Trial Tested. Results Driven.

Attorney Greg Deans and Attorney Katie Stepp
  1. Home
  2.  » 
  3. Firm News
  4.  » Buying a Home? What to Know About the “As Is” Clause

Buying a Home? What to Know About the “As Is” Clause

On Behalf of | Jun 4, 2021 | Firm News

Purchasing a house, especially for a first-time homebuyer, can be stressful. It’s easy to feel overwhelmed by the piles of paperwork involved. As with all contracts, it’s important to understand what you are signing. One common item during the purchase of a home is the “as is” clause — and it can have significant financial consequences for buyers who sign without considering their options. Here are three things you need to know before signing an “as is” clause when purchasing a home.

1) The purpose of the “as is“ clause is to insulate the seller.

The property owner bears continuing liability for remediation of costs of the property they are selling unless they have the buyer sign the “as is” clause. Once signed, the buyer agrees to purchase the property “as is” and releases the seller of any future liabilities (except certain incidents of fraud or misrepresentation of the property’s condition).

Knowing that the “as is” clause protects the seller, and not the buyer, it is imperative that the buyer does their due diligence before signing the agreement. The most important task would be to have a third-party professional perform an inspection. The regular inspection that takes place during the buying process is critical, but also consider additional inspections, even if they come out of your pocket. If the house is stucco in an area that is known to get black mold, have the stucco inspection performed. If you see cracks in the walls, have a foundation inspection performed. Termite inspections are very common. The bottom line is a few hundred dollars spent upfront will not only give you peace of mind but may save you thousands in the future.


2) Be wary of accepting a seller’s request to limit inspections in any way.

How can you accept something “as-is” without inspecting it first? If the seller makes any attempt to impede an inspection you request, especially if you are paying for it, it should immediately raise a red flag. Also, be wary if the seller suggests a particular inspector because you want to make sure that the professional you hire is impartial. Before signing anything, make sure you have chosen your inspectors and are satisfied that the results are thorough.


3) You are assuming responsibility for assessing the property’s value.

The seller names their price, but it is up to the buyer to negotiate, agree on a purchase price, and ultimately accept the value of the property. The seller sets the initial price and if the buyer is borrowing money, the bank will require an appraisal to assess whether the property is accurately valued. Most appraisers use “comps” or comparisons of recent transactions of similar properties within the same geographic region in order to recommend a value to a financial institution. Cash buyers are not required to have an appraisal, but this can inform the buyer of value. Thus, it is to the buyer’s advantage to have an appraisal whether it’s required or not. The onus is on the buyer for ultimately accepting the property’s value and accepting the property “as is.”

When dealing with contracts from the purchasing agreement, to banks and title companies, to real estate agents, it is always wise to have a legal advisor on your team. For most of us, purchasing a home is the largest financial transaction we’ll ever make. It should be an exciting time for you and your family, not a time wrought with worry. A legal advisor can help you understand each decision you are making throughout the process and guide you to make the right choices for your unique situation. Don’t accept an “as is” clause only to have regrets six months after your purchase. Build a team to help you have peace of mind and guide you through the process.