What Does "As Is" Mean?

Sometimes my buyers become alarmed when the seller says they want to sell their house "As Is". Many people assume this means the seller has something to hide. Not necessarily.

Sometimes a seller wants to sell a house "As Is" because they don't have money to make repairs or they don't want to be bothered making repairs. If the sale is a short sale or foreclosure, "As Is" is frequently a requirement of the seller's lender in the case of a short sale, or the owner/mortgage company in the case of a foreclosure.

When the buyer and seller agree that the house will be sold "As Is", they both sign the Arizona Association of Realtors "As Is" Addendum. Lines 23 to 24 of the "As Is" Addendum state the seller still has to tell the buyer about known problems with the property. This is required by Arizona law. However, lines 8 to 14 of the "As Is" Addendum state that the seller does not have to fix even the "Warranted Items" mentioned on lines 172 to 177 of the Purchase Contract. "Warranted Items" are heating, cooling, plumbing, electrical and mechanical systems, plus pool equipment, stove and built-in appliances. Without the "As Is" Addendum, the seller is obligated to fix "Warranted Items". With the "As Is" Addendum, the seller is not obligated to fix "Warranted Items". That is the only difference between "As Is" and "Not As Is". 

Lines 15 to 18 of the "As Is" Addendum state that the buyer is still allowed to do a home inspection, and the buyer retains the rights in Section 6j of the Purchase Contract. In other words, the buyer can cancel the Purchase Contract for any reason during the inspection period, and the buyer can even ask the seller to make repairs, but with the "As Is" Addendum, the seller is under no obligation to fix anything, even if the buyer's lender requires repairs such termite treatment or replacement of a broken water heater or window. If the buyer's lender requires repairs that the seller can't or won't make, usually the Purchase Contract has to be cancelled and the buyer gets his earnest money refunded.