Real estate owners forgoing improvements and repairs to attract buyers quickly may list their property for sale “as is.” As reported by Realtor.com, however, sellers have legal obligations to disclose any known issues to potential buyers. Buyers agreeing to purchase a property “as is” generally assume responsibility for problems. They may include issues such as a leaky roof.
Some investors use properties advertised in a “fixer-upper” condition to negotiate a lower price. Regardless of a price reduction, a deal may not go through without an inspection. Professional home inspectors may discover serious problems that could surface in the future.
Sellers may have liability for future defects
Obtaining a professional report may uncover a property’s actual condition. As noted by the International Association of Certified Home Inspectors, sellers failing to reveal known material defects may face legal action.
Professional home inspections typically review a property’s plumbing, electrical and HVAC systems. A property’s foundation may also have undiscovered issues that an experienced inspector may notice. The final report may describe potential issues that a seller should have disclosed.
Properties in disrepair may require an inspection contingency clause
Before completing a transaction, parties typically create a purchase agreement. The document may address concerns specific to a neglected property. Adding an inspection contingency clause, for example, may allow a buyer to abandon a deal. Doing so may avoid a buyer’s investment loss if a property’s repairs or improvements cost more than reasonably expected.
Inspections may provide buyers with a realistic idea of the cost of correcting a property’s condition. If the repairs exceed a buyer’s budget, he or she may use the additional cost to obtain a more favorable sales price.