Everything You Need to Know About Buying a Home "As Is" (and If You Should)

When the housing market is filled with stiff competition for the best homes in the best locations, making an offer on a house listed as is offers a unique set of rewards and risks: You might avoid a bidding war and land your dream home for a great price—or you could overpay for a home that requires major or unexpected renovations.

"In the last few years, making offers on properties as is and waiving inspections has been the norm," says Alexa Oestreicher of Legacy Properties Sotheby's International Realty in Portland, Maine. "With such little inventory, buyers had to be willing to take risks to buy a property. Is it a good idea? That depends on the buyer, their budget, and the property." 

Though the buying process for an as-is home has similarities throughout the country, real estate laws are set by each state, notes Patty Zusek of the National Association of Realtors. "Every state may have different rules and legalities to this," she says. "I strongly advise someone to seek counsel if buying or selling with an as-is addendum." 

If you're considering folding a few as-is homes into your current real estate search, understand these terms, reasons, risks, and rewards before you make an offer.

Buying a Home As Is: What This Term Means

If a seller has listed the house as is, then that's a sign that they aren't willing to put any additional work into the home or property before signing the sales papers. In a majority of cases, the buyer should expect to handle all repairs on their own—and with their own money. "If a seller is flexible, they may make reasonable concessions," says Heelah Saleem of Venture Sotheby's International Realty. "But you have to be prepared to purchase the home in its present condition and make whatever repairs necessary on your own dime."

Issues As-Is Homes Might Have

Often, sellers list homes as is because they know the house needs work—but the phrase itself doesn't indicate a specific set or type of repairs. An as-is home might need a single window replaced or an entirely new roof; it might have an insect infestation or major structural damage. The buyer may need to simply replace the hot water heater—or be required to install a modern heating system and updated electric.

"From a legal standpoint, this might mean that some of the usual representations—including working heat, hot water, and a roof free of leaks—may not be included in the contract," says Eileen O'Hara of Daniel Gale Sotheby's International Realty in New York.

Does As Is Mean Major Work?

Not always: As is can also indicate that the seller doesn't know the condition of the property, like if the home has been vacant or is being sold after the owner's death by an out-of-town relative. "Sometimes, homes are sold as-is because they are an estate sale and there is no one to give a history of the property," says Oestreicher.

In other cases, the as-is designation means the seller wants the process to move quickly, without holdups caused by fixing issues found during an inspection. Another reason for an as-is sale: If the home includes un-permitted renovations, such as a finished basement or a DIY deck, then as is means the buyer is purchasing the home with the understanding that those spaces haven't been inspected or deemed safe with a certificate of occupancy.

As-Is Home vs. Property

In some cases, it may be the property that's listed as is—instead of the house, cautions Oestreicher. "Some properties do not have an insurable title, and this carries significant risks," she says. "[With] a house, you can more easily guess the risks and if you can afford to carry them. A property that may have title issues, for example, may have heirs that come to claim the property after a sale, and something like that could tie you up in court for years—an unknown cost, and therefore very risky!"

Inspecting a Home Listed As Is

The buyer can—and absolutely should—get the home and property inspected, say experts. If you're considering an as-is house, commit to a detailed inspection to help you identify the renovations and repairs that might be required—including looking at the radon levels, well, and septic system. "Since in as-is sales, it will be the buyers' responsibility to undertake repairs once they purchase the house, buyers should make sure that the repairs needed are in their budget and that they have a realistic understanding of the potential cost of the repairs," says O'Hara. "In as-is sales, the ability to ask the seller to do the repairs or to give a credit for unexpected conditions that arise during the home inspection is often eliminated."

Inspections are key to deciding whether a specific home aligns with your budget, your move-in timeline, and your interest in living through a major renovation.

The Benefits of Buying a Home As Is

If you have the time, money, or DIY skills to tackle the repairs or permits required for the home, then considering an as-is home can help you avoid a bidding war. "Often, other buyers in the market are turned off by the as-is part of a sale, even if it does not mean the house is in poor condition—so it might present an opportunity for buyers not afraid of this situation," says O'Hara. "The reward is the ability to purchase a home with less competition than a buyer might encounter for other homes on the market."

An as-is home that hasn't drawn much interest also might give buyers the change to snag a deal, says Saleem. "If the home has sat for a long enough period with little to no offers, they may reconsider price," she says. "Armed with a good agent, comprehensive inspections, and licensed contractor, you may be able to negotiate a better price and get an amazing deal on the home of your dreams."