05/10/2023
Buying a home As Is
Buying a home is one of the single largest investments people will make in a lifetime.
Technically, As-Is means the homeowner is selling the home in its existing condition and will
make no repairs or improvements before the sale (or negotiate with the buyer for any credits
toward repairs).
As a buyer you might think that since the sellers aren’t going to make repairs, then there’s really
no need to waste money on a home inspection, right? That might sound reasonable but allow me to share something with you.
I recently performed an inspection for a young couple buying their first home on an “as-is” deal.
The home was completely renovated on the interior and exterior. So, they decided to
forego the inspection. Fortunately for them, their realtor strongly encouraged them to get the
home inspection anyway.
I completed the inspection and found the following major defects:
1. The roof had hail damage (approximately $10-12k)
2. The sewer had a blockage. It didn’t need to be replaced but if it had backed up into the
basement, that could mean a basement remodel. Not to mention the smell.
3. The home was wired with aluminum wiring on most circuits. Aluminum wiring should
not be used on circuits less than 30 amps (rewiring approx. $3-5k)
4. There was foundation movement (repairing foundation cracks and installing a couple of
I-beams approx. $6-10k)
5. It had high radon levels and needed a radon mitigation system installed ($2k)
When buying a home the buyer only has a short window (usually 10 to 15 days) to get an
inspection. After that window closes you’re stuck with any major repair costs. In the example
above I used conservative estimates for the repairs. This inspection cost them around $600
because they added a radon test and sewer camera inspection. As you can see the inspection
easily saved them over $20,000 in repairs. They were able to renegotiate the contract and got the
sellers to pay for the repairs. You might think why wouldn’t the seller just cancel the contract
and sell the home “as-is” to another buyer? After all, maybe the next buyer won’t get an
inspection. That’s because legally a homeowner is required to disclose these problems in the
property condition report. Before the inspection occurred, they may not have known all these
problems were present. After the inspection they often realize they can’t legally list the home
without disclosing the problems to the next buyer, so they often decide to make repairs or lower
the asking price.
Now this example may not be typical, the home you’re buying might not need any major or
expensive repairs. But, I often find defects which may not be expensive but are safety related.
I’ve found fire hazards, disconnected, damaged, or incorrectly installed water heater flues which
can cause carbon monoxide poisoning, and many other things which could potentially place your
family at risk. These types of concerns may not prevent you from buying the home but they are
certainly important to be aware of and correct before a tragedy occurs.
Having an inspection allows you to terminate the contract within the As-Is inspection timeframe
and walk away from the deal.