By Kay Wilson-Bolton
July 2, 2003
It happened again this week. Two good people are unhappy with the general real estate community and are asking hard questions about the “as is” clause in real estate purchase contracts.
It is true that you can sell your home “as is”. The caveat is that the buyer is entitled to know what “as is” really is.
It’s all in the contract. Don’t sign your contract unless you understand it. Buyers and sellers alike must not rely on what we said, what you thought you heard, or what you claim we meant. What does the contract say?
The California Residential Purchase Agreement (RPA-CA Page 3 of 9, paragraph 7A) states “property is sold (a) in its PRESENT physical condition as of the date of acceptance and (b) subject to Buyer’s Investigation rights”.
In real life, this means that buyers begin the process of purchasing a home in an “as is” condition. It also means that the buyer has a right to know the full condition of the property within a 17-day period and agree to either purchase it in the “as is” condition, ask the seller to fix certain items, or walk away. Buyers view this item as an invitation to further negotiate.
Items of concern include open electric wires, broken windows, torn window screens, an inoperative dishwasher, spa or microwave, leaking roof, excessive debris in the yard, singed rafters, broken sewer line, etc. etc.
If a property is on a well, the buyer may want to see a bacteria test. If the lot is in the country, a legal lot determination may be requested. It costs $200 and takes four weeks to obtain.
It is common for sellers to be irritated with buyers who ask for repairs. Please don’t be irritated. Unless a buyer received a fabulous price on a home, they likely will not overlook issues such as those related to health and safety. Even though the repairs seem to be minor, if the buyers are not handy, they will likely ask that the seller complete them.
The irritation can begin when the home inspection takes place and the sellers are not told what to expect, such as how many people will be present, who will be present and how long it will take? The worst scenario is when the home inspector goes over his report in the living room and the sellers are within earshot.
If the seller made concessions on their sales price at the outset, adding a list of repairs to the equation is usually a setup for contention.
Sellers have the right to say “no” to repair requests and begin the selling process again but most sellers agree to repair health and safety items. My litmus test is “if you stay in the house, and now that you know, will you fix these things?”
From today on, I promise to spend more time on explaining the dynamics of “as is”. There are some nice people who are not happy with me because we didn’t spend enough time on this single item. I am deeply sorry.
This goes to the heart of who REALTORS® are and what we do. For a company like ours, we’re not called to be best. We are called to be different.
Kay Wilson-Bolton is the owner of CENTURY 21 Ojai Valley and CENTURY 21 Buena Vista. She brings a regional perspective to local issues. She can be reached at 340.5025.