What Does "As-Is" Mean When Buying a Home in Albuquerque?
Choosing a home for sale in Albuquerque may involve seeing some listings marketed with the term "as-is." When a home is sold as-is, it's appealing to sellers because they don't have to spend time or money fixing certain things. This is an effective option for those who wish to sell quickly.
Albuquerque home buyers will usually find the homes cheaper than similar properties.
Buying a home as-is can have its perks, particularly in today's competitive housing market, but you also need to understand what it means.
What Does As-Is Mean?
Sellers who list their homes as-is make no repairs before closing. There are no guarantees that everything will work or even be in good condition. A seller's disclosure is also not required.
It is your responsibility as the buyer to fix a major issue you find in a property advertised as being as-is.
Disclosure requirements for an as-is seller still apply. This includes information about conditions such as lead paint.
A home described as "as-is" doesn't necessarily mean it's damaged beyond repair. Even if there are minor issues, a home may still be listed as-is.
The seller might be in debt, or they might be in a rush and not have time to wait for contractors to finish even cosmetic repairs.
What Factors Should You Consider Before Buying An As-Is House?
A few things need to be considered when purchasing something as-is.
There is a possibility that the house isn't livable in its current state. Perhaps you are willing to make the necessary repairs, but will your lender approve?
The livability of a property is a requirement for many types of loans. Such criteria are known as minimum property requirements (MPRs). An appraiser will assess a property to determine if it meets the MPRs.
Conventional loans aren't guaranteed or insured by the federal government. Fannie Mae and Freddie Mac also require many conventional loans to meet their requirements. Fannie Mae and Freddie Mac standards allow for the purchase of homes with only minor defects. Structure issues must be the result of normal wear and tear, but the house still needs to be safe.
An as-is property could still be eligible for a conforming loan even if it has plumbing leaks, interior wall damage, or missing light fixtures, for example.
MPRs are stricter for government-backed loans, such as a VA loan.
Getting a Home Inspection
Inspections are required when buying a house as-is. They help you understand what the issues are so that you can budget accordingly.
An inspection is not an appraisal and usually isn’t required.
The value of a property is determined by an appraisal, which is usually required by a lender. You may decide to have a home inspection done.
Partial As-Is Homes
An as-is sale of a home doesn't mean the whole thing is for sale as-is. A seller might list a property as-is but only reference certain parts of it. A shed or garage, as well as a pool that has broken, are usually partial as-is features.
When the seller says "as-is", you must ask exactly what they mean.
Required Disclosures
Finally, when you buy an as-is home, you do not waive your right to disclosures. State and federal guidelines and regulations determine what sellers have to tell you about the property.
If a seller doesn’t let you know about a known problem required in your state, you may be able to sue for the repair costs or damages.
The only federal disclosure requirement currently is for lead paint. If you’re buying a home built before 1978, the seller has to tell you if it’s ever had lead paint.
Finally, working with a great agent can be an important asset if you’re thinking about buying a home as-is. A good agent understands local New Mexico and Albuquerque disclosure laws and can help you understand the specific implications of buying as-is in your situation.
Sandi Pressley and her team can help you feel more confident in your decision or decide when it’s best not to buy.
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