What Does As-Is Mean for Buyers? |Santa Clara County High's and Low's

 






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What Does As-Is Mean for Buyers?

Understanding 'As Is' and Due Diligence

What does as is mean? It means As disclosed, as it's presented, as you go through your due diligence, that's what you're buying. You have to understand that there's a due diligence period and that's contingency. You have 17 days standard. Sometimes you can waive that if The seller gives you all the disclosures, including inspection reports.

I had this discussion yesterday with a client, what it means is that they're not going to do any repairs. The seller is not going to offer, any repair credits or lowering the price It's very specific. You have to understand that. It means that you're coming in saying, I'm going to buy this as I see it, as it's been presented to me, it means it could have crack foundations that the seller doesn't know about, sellers, a layman, they're not privy to that. So if the seller didn't get inspections and it has a foundation crack or crack in the pool, or the HVAC is end of life or the roof is end of life, they're not going to tell you that.

They don't have the ability to tell you that. So understand that the seller is just saying, I'm not going to do whatever it is. I'm just going to tell you what I've done through the disclosure process. So what happens if you buy a house and two years later you have a door that doesn't work and then you have an inspector or a contractor come out and he says you have major foundation damage.

How are you going to prove that the seller knew that? He just thought, eh, it just happens, never really paid attention to it. It absolutely happens, right? You can find out if he's tried to hide cracks or patched it up But then the onus is on you to prove that he has done those repairs, not the previous owner right?

And as a seller still needs to meet minimums and State and federal disclosure standards. There's something called TDS, I always get grief about, Oh my God, this is so tenuous. It's such a pain Why do I have to do all this? Because it's your duty as a seller to disclose every material fact that you know about that house.

Everything that you've done to the house, you've replaced the floors, polished the floors, replaced switches, replaced lights, moved. Plumbing you have to disclose everything that you've done. That's the minimum state and federal disclosures and through lawsuits of 125 years of doing this we've had disclosures upon disclosures that fit pretty much everything.


Buyer's Responsibilities and Inspections


Okay, and it's your duty as a seller To disclose everything that you know, that's materially wrong with that house or that's been repaired on that house as a buyer, your job and your duty and contractual terms is to read all the disclosures, all the inspections, the prelim, all the reports, everything that comes your way, because it's your job to unearth everything that might scare you away from that house once you bought it and it's been disclosed and you didn't catch it and you didn't read it, shame on you.  

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Factors to Consider Before Buying 'As Is'

It's buyer beware factors you should consider before buying an as is house. If you're thinking about buying something as is, you need to consider a few things. Same thing with a car, right?

You can have a car inspected before you buy it, but once you buy it and you didn't have it inspected, they didn't take it out and run it a few miles and find out that there's a transmission issue. Then that's on you, right?

First, it's possible home isn't livable in its current state. Okay. So what happens if the house isn't livable? You're still buying it as is what happens if it has no kitchen, no plumbing, no electrical Let's say the sellers moved out and somebody came in and stole the copper pipes underneath the house.

It's happened to me before. We'll take care of it. It's surmountable if you catch it during the transaction, but if you catch it afterwards, that's on you as the buyer, right? An appraiser is going to come in and do their inspection to look for anything that's out of whack and depending on the type of loan, if it's a conventional, it's going to be a pretty light inspection, but if it's FHA or VA or USDA, they're going to come in and make sure that there's certain habitability requirements. Example, running water, electricity, heating, cooling, a kitchen, a stove, that type of stuff has to be in that house working and operable a VA appraisal is going to be a lot more in depth because the appraiser is going to have to look at that. They're also going to look at the CO detectors and the smoke detectors, making sure that they're in working order because that's part of their job.

The straps around the water heater and, certain things that have to be done, those are minimum. State guidelines in California or minimum property requirements. conventional loan, not insured or guaranteed by the federal government. 




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Home Inspections and Legalities

So let's say that you're buying a house as is, and the seller did not do inspections. And you're buying it as is, you still have the right and duty to do an inspection. You still have that ability, but understand the seller's probably not going to do any repairs that you might find. So you're just buying what you understand is an as is house and it has a crack foundation.

You're pretty much stuck buying it. As is gets into a legal mumbo jumbo. That means you might have to go to court while you're in contract saying, Hey, I found this foundation repair. I still want to buy this house. I think the seller should buy it, but you wrote in your contract saying as is. So what's the judge going to say?

An inspection is not required. It's highly suggested because it lowers the barrier to entry, the fear factor for the buyer. typically it's for inspections. You can get a property inspection, a termite inspection, foundation or chimney inspection, a pool inspection.

if you have septic or propane or water, you have to have those inspected as well, because you need to be able to present that to the buyer and let them know what they're buying. And what happens if the seller isn't doing that?

The buyer to decide if they're going to do that, but I always make my sellers pay for it because it's just a lot easier. My job is to make your transaction as smooth as possible. If you come up against me and make this a brick wall saying, I don't want to do inspections.

Don't cry when they come back and say there's 30, 000 worth of termite repair, we're getting out. Or you can help pay for it or you can credit it, right? Even though it's as is. 


Partial 'As Is' and Specific Exclusions


So just understand that partial as is doesn't mean the entire thing is wet. Yeah. So it could be certain things like the pool.

There's certain things that are wrong with the house. You could say I'm not going to warranty this, but you could put that in the disclosures as well, you can say, Hey, my pool has a massive crack in it. It's probably cheaper to just. Tear it out than to have it repaired. a seller can list a property as is, but only referencing certain parts, sheds, garage, broken pools. You need to ask the seller exactly what they're referring to. It's like the same thing as warranties. There's exclusionary and inclusionary warranties.

And what you want to find are the exclusionary. Once to know what you're buying, if it's a warranty, like even on a car, what does it not cover? Does it not cover the powertrain? Does it not cover the electrical? Does it not cover wear and tear? 

You're buying a resale house. Even a new house is going to be perfect. Just take that into consideration required disclosures. 


Required Disclosures and Legal Protections


There's still required disclosures that the seller has to present the buyer, the TDS, SPQ. And I can tell you what that is. You just have to ask, unless you're doing a trustee situation where you're selling your parents house because they've passed on you're the trustee and you haven't lived there so you don't know what's wrong with the house You haven't lived there in the past two or three years.

So you can't say that I don't know what's wrong with the house. If you know something that's materially wrong with it You have to disclose that. But you're not statutorily required by law in California to produce a TDS or SPQ.

If you do repairs on the house, then that opens you up to litigation. So you should cover yourself with the SPQ fully disclose what you've done. With or without a contractor, licensed or not, with or without permits. Totally up to you how to do that, 



Los Gatos Home of the Week

Real Estate Listings of the Week

So with that being said, I'm gonna skip some stuff to get into it Los Gatos house of the week. not my listing four million dollars three bedroom one bath 2,300 square feet built in 1915. This is a hundred and ten years old I chose it because it's walking distance to downtown Main street you only need one or two pictures Go right into what matters like the kitchen and the living room and the trim.

I think we've talked about this one already. This one looks familiar. This is beautiful. Love the floor plans. Thank you for doing floor plans. All right. List price reduction.


Santa Clara County Price Reductions 

This is the list price reduction of the week. This is McKean road. The reason why I picked is I have a client looking for this, but only in Gilroy area, two and a half million dollars. Not my listing, three bedroom, two bath, 2, 200 square feet, built in 1975. And it's right by Calero Dam. So there you go.

Let's take a look at some of these pictures. There's a whole whopping 12 of them.

Not much to look at, but you got a garage, kitchen. And let's see what the original price was. 2. 9 down to 2. 5. There you go. 




Santa Clara County High's and Low's

Market Highlights and Conclusion

these are the highs and lows of Santa Clara County for this week. Quinn Hill Ave, Los Altos, not my listing, sold for 100 percent because it didn't have a realist price. They sold it off market. This is dangerous because you don't ever really know what you're buying. Or what the market will present. sometimes people don't want to put their house on market and they want to sell it to somebody that they know and they use an agent to help them do the paperwork. It's a pretty house.

34th street is the lowest priced sold house in Santa Clara County this week. And it's right by one Oh one and eight. three bedrooms, one bath, 1290 square feet, 6 500 square feet lot built in 1955. Not much to look at basically buying the lot.

That's all for over listing price. Thanks for watching. I'm Vito with Abitano. We'll see you out there.


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Vito Scarnecchia

Real Estate Broker, Veteran, Dad

DRE#: 01407676

408-705-6817

Vito@abitano.com

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