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Thursday, May 25, 2017

Home Buyer Tips: "As Is" "Where Is".... What is a buyer to do?

In the current Florida real estate market many sellers are opting for listing their property "as is" as opposed to leaving the door open for negotiation on repairer.  This marketing strategy works well when the property is
  1. in reasonably good condition or
  2. marketed with known problems identified and priced accordingly.
So how does a buyer approach proprieties being sold "as is?"

No differently than any other property.

Most offers to purchase (here in Florida) have an inspection contingency.  This inspection allows the prospective buyer the opportunity to have the property inspected and then decide whether they want to proceed. I like to call his a get out of jail free card because there is no pass or fail on the inspection itself.  It is simply a buyer's subjective decision.

My advice to buyers is simple.  Lets do as much preliminary"poking around" as possible before making an offer.  Of course in a market where there are more buyers than sellers taking too long can be a mistake

If the mortgage is VA or FHA there are some basic condition issues that need to be right to get through the appraisal (think roof, AC, plumbing, electrical). 

If financing is going to be a challenge (aside from obtaining an FHA 203k loan)  then it may be best to keep looking.  Of course repairs and overall condition depends on the buyer's experience and circumstances.  Most buyers want a move in ready home - not a fixer upper project!

So what does a prospective buyer do with an inspection report?   A word of caution about property inspection reports...The report can be pretty comprehensive and look, on the surface, to be much worse than it is because most inspectors includes facts about the property as well.

As a home buyer you should never ever ever offer to purchase a home without an inspection contingency.   Still, buyers must keep in mind, regardless of outcome, an inspection report is only an assessment a property’s condition at one specific point in time.

Based on the buyer's response to the report, real estate agents take an action as directed by the client.  This action may be 
  • request repairs be made (sometimes sellers acquiesce!)
  • negotiate a reduction in the contract price (think a bird in the hand),
  • a combination of the first two, or
  • just cancel the contract.  Sometimes walking away is he best choice!  
Either way, buyers should exercise their due diligence period efficiently (inspect quickly, decide quickly) because in the current market the next house may sell before they get to it!

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