What is an “As-Is” Contract?
The Florida As-Is Contract is the most commonly used standard real estate contracts. This form is often required for bank-owned foreclosure sales and short sales. Knowing the key characteristics of this form can help buyers protect their legal interests.
The foundation of the as-is contract is that the buyer agrees to purchase the property is its current condition and the seller makes no promises to pay for any necessary repairs. REOs, shorts sales, foreclosures and other distressed sales commonly use this type of contract because banks usually are not willing to perform additional repairs when the owners are already underwater in the homes.
However, the buyer is usually able to have an inspection completed. The seller does not have to repair anything that is discovered during the inspection. The buyer has the right to cancel the contract at his or her sole discretion. Even if the buyer has disclosed known problems about the house and this information is included on the Property Disclosure, the buyer has the right to cancel the purchase if he or she does not like the information revealed in the property inspection. The buyer can essentially back out of the purchase agreement for nearly any reason. However, he or she must exercise this rights within the permitted timeframe after the inspection is completed. If he or she cancels the contract within the proper timeframe, he or she can usually receive the earnest money back, also.
Although the seller does not have to make any repairs, the parties still have the right to negotiate if they encounter a major problem. Although the term “as-is” may seem intimidating and risky, the ability to have the inspection and cancel the contract provides a safety cushion for buyers who enter into such agreements. A Florida real estate agent can discuss your options regarding such contracts and whether this type of contract will protect your interests in your particular situation.
If you have any questions regarding the Miami real estate market, contact Alex Larmier at 786-301-5357, or by email at Alex@mymiamiexperts.com