Cathy Yanda, Local Real Estate Agent, Baird & Warner

A licensed real estate agent can be an invaluable asset when you want to buy any property. Real estate agents are local experts who understand disclosure laws and the home buying process. Experienced real estate agents can explain in more detail exactly what buying an “as-is” property means for you. Some homes may need extreme repairs, which would cancel out any savings you’d get by buying the home. Experts say you should put away 10% – 25% of your budget for repairs when you buy an “as-is” home. However, an agent and a home inspector can help you come up with an accurate budget for your situation.

“As-is” doesn’t always mean that the entire property is being sold in its current condition. Sometimes, a seller lists a property as-is but only for a specific part of the home. Some common elements that a homeowner may list as-is include fireplaces, sheds, garages, appliances or pools. Have your real estate agent ask the seller exactly what “as-is” means with their property. If only certain features are for sale as-is, you may be able to negotiate repair requests on other parts of the property.

If you want to buy an “as-is” home, we always recommend a home inspection. A home inspector will let you know all the major issues. This gives you a good idea of what you’ll need to fix and how much it’ll cost if you decide to buy the home. A home inspection is different from an appraisal and is typically not a required part of the mortgage process. Inspectors are there to look for major issues. Appraisers are there to assess the value of the property. Your mortgage lender will probably require an appraisal, but the home inspection will be an optional part of the buying transaction.

FHA loans are affordable government-backed loans. To qualify for an FHA loan, the home you buy needs to meet minimum property standards. The home needs to be safe for you and your family to occupy at the time of purchase, and it needs to be structurally sound. In other words, it must not have any physical deficiencies or conditions that compromise its structural integrity. Most homes that need total renovations won’t qualify for an FHA loan. The FHA’s minimum property standards cover three requirements: Safety: The house should provide a safe and healthy environment. Security: The property should offer its occupants protection. Soundness: The home shouldn’t have any structural defects. Your appraiser will note these minor deficiencies in the appraisal report.

Sellers list their homes for sale as-is when they don’t want to do any repairs before closing. It means there are no guarantees from the seller that everything is in working condition. If you buy an “as-is” home and later find major problems, you’re responsible for the repairs. “As-is” sellers still need to meet federal and state minimum disclosure standards, which include telling you about conditions like lead paint. “As-is” doesn’t always mean broken beyond repair. There are many reasons why a seller might list a home as-is even with minor or no issues. The seller might not have time to wait for contractors to finish a major job. There are also plenty of non-repair-related reasons why a seller might list a home as-is.