Is AS-IS really as-is? That is the question.
I get a lot of questions about bank owned homes and homes being sold AS-IS. People see terms like “AS-IS”, “no Spuds”, “no CLUE report” in the description of the home. So what does all this mean? Well, assuming you are looking at homes listed by a broker, it is pretty simple. If you are looking at homes being sold at an auction of some sort, you are on your own! For my explanations below, let’s assume the home is being listed by a broker. In today’s market most banks and lenders are using brokers so this is the most common situation.
AS-IS means just that. The seller is not willing or able to do any repairs on the home. That said, assuming you are using our standard Arizona Residential Real Estate Contract, which almost all agents do, you are still given a 10 day period to inspect the home. You still have the right to cancel the contract if the inspection turns up something that you can’t live with. You should still get your earnest deposit back as well. You as a buyer are still making the final decision to move forward but you do so knowing any and all repairs will have to be at your expense after you buy the home.
No Spuds. Sellers are required to complete a Seller’s Property Disclosure Statement(SPDS). Spuds is the slang term. Technically all sellers are required to do this on all transactions that use the standard contract. Banks and investors that have assumed a property via foreclosure or some other method will usually make you waive the right to a completed SPDS. It isn’t a big loss to you as the buyer, however. The bank or investor has never occupied the property so the SPDS would be blank. This is why you get a good home inspection!
No CLUE report. The CLUE report is a report that shows the insurance claim history for the property under the current owner. Since these homes have just been acquired by the bank, there would be no claims history so the report would be blank. They are just trying to avoid the hassle of producing a blank report.
I hope this helps.
