Technically, yes, it really is sold “as-is.” Of course, the “it” in this case is a home, and the answer is based on the most commonly used purchase agreement for home sales in California — the Residential Purchase Agreement (RPA) — that is published as a member service to all California Realtors.
What the contract language says is that the buyer agrees to buy a property in its present, “as-is” condition. But it also states that the buyer has investigation rights to determine exactly what that “as-is” condition really is.
This is where things usually take a turn and start to not look like an “as-is” sale. That is because the RPA also includes provisions for the buyer to request repairs and/or credit(s) from the seller based on their findings. And hence, the “as-is” sale can only stay an “as-is” sale if the seller refuses these buyer requests and the buyer proceeds in spite of the property deficiencies.
This is not what usually happens. Normally, if both parties really want to make the sale go through, there is likely to be some give and take within the guidelines of the RPA. This process is commonly known as the second negotiation. Once agreement is reached on repairs and/or credits, the buyer and seller can move forward to closing. If they don’t come to terms, then the sale will be canceled.
One of the common exceptions in the current market is the distressed property purchase agreements. Since the sale of bank-owned and short sale properties are directly controlled by the given institution, the banks draft the contracts and addenda that are used in these sales.
If you’re involved as a buyer or seller in a REO or short sale transaction, always read these documents. They will have important and binding language regarding all of this subject matter. Your Realtor can help you determine what may be best for your particular needs and situation.
As you can now hopefully see, yes it is “as-is,” but not all the time. And, as it bears repeating, please read all of the important paperwork.
— Paul Suding, a real estate agent with Cool Santa Barbara Homes and Village Properties, is president of the Santa Barbara Association of Realtors. He can be contacted at .(JavaScript must be enabled to view this email address) or 805.455.8055.
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