Risks And Rewards Of Purchasing An As-Is House

Coming across home listings that state they are being sold "as-is" is not something that is uncommon in the world of real estate. There are many homeowners who choose to sell in this manner, and as a buyer, you should understand both the risks and rewards you face when choosing to purchase an as-is home.

The risks of buying as-is

An as-is home that is listed for sale is a home that comes exactly as you see it. The owner of it does not plan to renovate any parts of it, fix anything, or make any changes. If the home has issues, you inherit them if you buy the house. Due to the nature of how an as-is home sale works, you will want to take a lot of precautions before signing your name on a purchase offer to buy it. Taking precautions will reduce your risks in the deal and help you learn more about the property and its conditions.

One risk you assume with an as-is home is that it may need work. While you might be able to see a lot of the work the house needs, there is a chance it will need work in areas you cannot really see. The plumbing system is an example of this. If the home is several decades old and has never had the pipes replaced, you might find out that you must replace them all to stop all the leaks or to have drainpipes that are not clogged.

Secondly, you take the risk of having issues getting a loan on the house. Lenders can be hesitant to loan money on homes that need a lot of work. If the as-is home you want to buy needs a lot of work, a bank may require a larger down payment than you had originally planned to offer.

The rewards of buying as-is

There are several great rewards you may experience from buying an as-is home, but the main one is the potential you have to make money on it. A lot of people who sell as-is are selling this way to have a quick sale. The result of this is that the price of an as-is home might be very favorable for you. If you get a good deal on it and can fix it up, you might earn a good profit if you sell it in the next few years.

Fully evaluating any home you are considering purchasing is always an important step in buying a house, and your real estate agent will be able to assist you in this.