Buying a Las Vegas "As-Is" Property
“As is” properties are properties that are not warranted to be free of defects. Of course, selling a Las Vegas property “as is” does not free the seller from the legal responsibility to the prospective buyer to freely and openly disclose all defects.
However, if the buyer has been informed of these defects and still chooses to knowingly purchase the property, than the seller can no longer be held responsible nor will be legally required to undertake any repairs.
However, if a home inspection uncovers defects not disclosed by the seller, either purposely or accidentally overlooked, the seller would then be held responsible for those repairs.
In considering a property in need of repairs, repairs in which the buyer knows he will have to foot the bill, a thorough home inspection prior to purchase is an absolute necessity.
For example, the seller may say that the roof “needs some work” but a home inspection may reveal that the roof needs to be replaced. If the cost of roof replacement amounts to approximately $35,000, by how much would the seller be willing or able to lower the selling price?
“As is” properties are considered bargain properties because the seller would have to offer the residence at a considerably under market price in order to attract a buyer who would willingly undertake repairs to the property.
But, as in the case of a major repair, what would a “bargain price” to the buyer actually be? That is why “as is” property purchases should be undertaken with extreme caution.
If the “as is” property is Real Estate Owned, (an REO) and is being marketed by a government agency such as HUD or Freddie Mac, or by a nationally chartered bank, then full disclosure to the seller can be waived, as these entities are not required by law to advise the prospective buyer of any defects.
Unlike the purchase of a home in the conventional manner, these large REO sellers will not accept, and in fact will outright reject any submitted sales contract that contains a required, “subject to inspection” clause.
In other words, when buying an “as is” property from one of these large institutional entities, you are stuck with the deal, even if an after purchase inspection turns up major defects.
A prospective buyer of an “as is” property should not be so short sighted as to be blinded by a very low asking price, and willingly make the purchase without pausing to realize that the property definitely has repair problems.
A thorough home inspection could reveal major problems that would negate the low asking price and become a “money trap” for the buyer. If the house has structural or foundation problems, that would be an indication to the buyer to look elsewhere for his “bargain property.”
If you have any questions about investing in Las Vegas Real Estate, feel free to give us a call at 702-376-0088.