When a home is marketed as being sold “as is,” it’s usually a signal to potential buyers that at the asking price, the Seller will not be making any repairs to the home, nor giving credits for it’s condition. In other words, the buyer doesn’t get the benefit of the discounted price for the “fixer upper,” and also repairs or credits for it’s poor condition.
A more common situation is where the contract recites that the home is sold “as is.” Unlike when used in marketing a home, when those words are used in the contract, the purpose is to recite that the Seller is obligated to deliver the home at the time of closing in materially the same condition as at the time of the execution of the contracts. Therefore it is critical to define in the contract what “as is”- is. If the home inspection is completed when the contracts are signed, it is important to share with your attorney all repairs or credits that were negotiated to be completed or given as part of the transaction. If the home inspection, or any parts of it (water or radon test results, for example) are incomplete as of the signing of the contract, then you should ensure the contract includes a contingency that the buyer’s obligations are contingent on the satisfactory results of the outstanding inspection items. Like at a wedding, you must “speak now, or forever hold your peace!” If it’s not put in the contract, the issue cannot later be added as of right.
The buyer is then given the opportunity to conduct a final walk through, usually the day of the closing. The purpose of the walk through is NOT to conduct another full inspection. The buyer may not then raise objections to conditions that existed when the contracts were executed. Rather, the walk through is for the sole purpose of confirming that the agreed repairs from the contract (if any) were completed properly, and to confirm the home is vacant and broom clean with no NEW damage, at the time of the closing. Again, if you notice an issue during the walk through that already existed when the original inspection was done, you may NOT raise it as a walkthrough issue. If a genuine walk through issue is raised (an agreed repair was not made, or the home is not vacant, or there is new damage since the contract), then the issue is usually addressed at the closing by way of a credit or an escrow being held to take care of the issue post closing. But again, ALL walkthrough issues need to be addressed at or prior to the closing. The buyer can’t raise additional items discovered after the closing, as they move in. (Remember, “speak now, or……”… you know).
On rare occasions, the parties agree that a buyer can take occupancy of the home BEFORE the closing (early occupancy agreement) or the seller can retain possession of the home for a period AFTER the closing (holdover agreement). In those cases, the magic moment for raising a walkthrough issue is not at the time of the closing, but rather when occupancy is given (whether in advance, or after the closing).
The bottom line? Make sure you put in writing at the contract stage what you expect delivered to you at closing, and then be careful to check all was taken care of when you do your walk through the day of the closing!