What does "As Is" Mean in Real Estate

The real estate industry has its own unique language that can sometimes be confusing. One term that comes up a lot, especially in these times of bank-owned properties, short sales, and foreclosures, is “as is” and its variations “where is”, and “in its present condition”.

There are some agents who feel that part of the reason we see "as is" cropping up more and more is because more buyers are being coached to use the home inspection as a reason to reopen negotiations (sometimes justified, sometimes not) and that sellers and their agents, who may have already lowered the price several times, are using it as a tactic to close the door on this practice.

Sellers commonly mistake “As is” as a way to offset deferred repairs with a discounted asking price usually reflecting the condition. This is not a term to be used lightly, because there are costs as well as benefits, and if you don’t know what it really means, you shouldn’t use it.

“As is” is actually a legal term and concept used to disclaim liability for the condition of the house being sold. It says that the seller is selling, and the buyer is buying the house in whatever condition it presently exists, and that the buyer is accepting the house "with all faults", whether or not immediately apparent.

It is most commonly (and correctly) used in estate situations or when banks or relocation companies own the property, where the sellers may have never lived in the house and have no knowledge of any issues/defects.

In Massachusetts, the seller and their agent must disclose any known defects in the property in an “as is” purchase, but they don’t have to disclose what they don’t know.

This is the classic "buyer beware" situation, where any buyer must take the time to examine the home before accepting it. The buyer should also obtain expert inspection and legal advice and do what their experts recommend. They should also make sure their contract is contingent upon acceptable inspection approved by buyer, but understand that their only option is to take the house or walk-away, the seller is under no obligation to re-negotiate any inspection issues.

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