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Home > Blog > Real Estate Transaction > What Does “As Is” Mean In Your Real Estate Contract?

What Does “As Is” Mean In Your Real Estate Contract?


If you are selling property, you may naturally want to include an “As Is” clause in your real estate contract. Although these clauses can be very helpful to sellers of real estate, they often are not the “bulletproof vest” that many sellers think that they are.

Misconceptions About As Is Clauses

Many people have the misconception that if you sell a house As Is, that the buyer assumes all risk—the buyer buys the property, faults, problems and all, and there is nothing the buyer can do to hold the seller responsible for any problems in the property.

However, that is not how As Is clauses in real estate contracts work.

An As Is clause does not excuse the seller from making the required disclosures that would be required in a standard real estate contract.

Things like structural problems, code violations, anything that affects the value of the property, electrical or plumbing problems, problems with the roof, or foundation-destroying organisms (among other potential problems) all, still must be disclosed.

Additionally, just as in a non-as-is-clause contract, the seller has to disclose anything that could materially affect the value or desirability of the property. The buyer can sue the seller, in the event something that must be disclosed is not disclosed, or if there is other fraud or misrepresentation.

What Does the As Is Clause Do?

The As Is clause comes into play, because the clause allows the seller to wash his or her hands of any obligation to pay for any defects or problems that are disclosed, or which are found after an inspection, or problems that the seller discloses to the buyer. The buyer must agree to purchase the property in its current condition, after a 15-day inspection window.

The buyer in an As Is contract will have 15 days to inspect the property. If a problem comes up, the buyer can ask the seller to lower the sale price, or give some kind of credit to account for the repair cost. The seller doesn’t have to oblige. If an agreement can’t be reached within the 15 day inspection period, the buyer can back out of the deal, with a full return of any deposit money.

Additionally, the buyer may have to pay for any repairs that may be required by the lender, in order to effectuate the sale.

This all means that the parties don’t negotiate who will pay for what when it comes to repairs.

Should Buyers Use As Is Clauses?

For buyers, As Is clauses aren’t very beneficial—although there may be situations where you can negotiate a lowered sale price, in return for accepting the property as is.

For a buyer, As Is doesn’t mean you are locked into buying the property—it just means that you only have 15 days to do your inspection, and then decide if you will take the property “warts and all,” or whether you will walk away from the property.

Questions about your real estate closing? Contact the Tampa real estate transaction lawyers at Gilbert Garcia Group, P.A.can help.

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