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Buying & closing

As-Is Sale

Also called as-is, sold as-is, as-is condition

In short

An as-is sale means the seller will not make repairs or offer credits for the property's condition. The buyer accepts the home in its current state, though inspection rights and required disclosures may still apply.

Seller repairs
None
Common with
REO, estates, auctions
Inspection
Usually still allowed
Price effect
Reflects condition risk

What as-is does and doesn't mean

As-is means the seller won't fix anything. It does not, on its own, mean you can't inspect, and in most states it doesn't excuse a seller from disclosing known defects they are required to disclose. Lenders and banks selling REO homes are often exempt from standard seller disclosure forms because they never lived there.

Where you'll see it

Nearly every bank-owned listing, many short sales, estate sales and investor flips are sold as-is. Purchases at a foreclosure auction are as-is in the strictest sense: no inspection, no contingencies and no recourse.

Protecting yourself

Keep an inspection contingency so you can walk away if the report is bad. Get repair estimates and factor them into your offer. If you're financing, check that the property's condition meets lender standards or consider a renovation loan like an FHA 203(k).

Example

Pricing an as-is REO

A bank lists a vacant home as-is for $180,000. Similar updated homes sell for $240,000. The buyer's inspection estimates $35,000 in repairs: roof, HVAC and flooring. The buyer offers $175,000, reasoning that $175,000 + $35,000 = $210,000 leaves room for holding costs and risk compared with buying an updated home.

As-Is Sale vs. Contingency

As-Is Sale

An as-is sale means the seller will not make repairs or offer credits for the property's condition. The buyer accepts the home in its current state, though inspection rights and required disclosures may still apply.

Contingency

A contingency is a condition in a purchase contract that must be met for the sale to go through. If it isn't met by its deadline, the buyer can usually cancel and keep their earnest money.

The differenceAs-is limits what the seller will do (no repairs); a contingency gives the buyer the right to cancel. You can buy as-is and still keep an inspection contingency.

Frequently Asked Questions

Related terms

Home InspectionBuying & closingA home inspection is a professional visual examination of a home's structure and systems, ordered by the buyer to find defects before closing. It usually happens during the inspection contingency period.REO / Bank-Owned PropertyForeclosure processAn REO (real estate owned) or bank-owned property is a home a lender took back after it failed to sell at foreclosure auction. The lender then sells it, usually through a real estate agent.Foreclosure AuctionForeclosure processA foreclosure auction is the public sale of a property after a borrower defaults, where the highest bidder buys it, usually with cash and as-is. If no one outbids the lender, it becomes bank-owned.After Repair Value (ARV)InvestingAfter repair value (ARV) is the estimated market value of a property once planned repairs and renovations are complete. Investors use it to decide how much to pay for a fixer-upper.Short SaleForeclosure processA short sale is the sale of a home for less than the amount owed on its mortgage, with the lender's approval. The lender agrees to accept the reduced proceeds to avoid a foreclosure.FHA 203(k) LoanMortgages & financingAn FHA 203(k) loan is a government-insured mortgage that combines a home's purchase price and the cost of repairs into one loan. It lets owner-occupants buy and fix up homes that need work.Earnest MoneyBuying & closingEarnest money is a deposit a buyer puts down when an offer is accepted to show good faith. It is held in escrow and usually credited toward the down payment or closing costs at closing.Title SearchTitle & legalA title search is a review of public records to confirm who legally owns a property and to find any liens, judgments, easements or other claims that could affect ownership.

Learn more in the knowledge base

Inspecting and Negotiating on a Bank-Owned (REO) PropertyGuide · 7 min readBank-owned homes are sold as-is, often after sitting vacant, so a thorough inspection is the most important step in the purchase. This guide covers how to get the home ready to inspect, what to look for, what banks will and will not negotiate and how to handle appraisal and title issues before closing.How to Buy a Bank-Owned Home: A Step-by-Step GuideGuide · 6 min readBuying a bank-owned home looks like a regular purchase, but the seller is a lender with its own forms, deadlines and approval process. This guide walks through each step, from getting financing in place to closing, and points out where REO deals differ from a typical sale.Researching a Foreclosure Property Before the AuctionGuide · 6 min readAt a foreclosure auction you usually buy as-is, unseen and without contingencies, so research done before the sale is your only protection. This guide covers how to confirm the sale details, check title and liens, estimate value and repairs from the outside and turn it all into a maximum bid.
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Disclaimer: The information on this page is for general educational purposes only and is not legal, financial, tax or investment advice. Laws, lending rules and market conditions vary by state and change over time, and any figures shown are estimates. Before you buy, sell, finance or bid on a property, consult a qualified attorney, financial advisor, lender or licensed real estate professional about your situation.