"AS IS" ISN'T ALWAYS AS IS

Well, another interesting happening today - we did a final walkthrough on a house sale prior to closing. This house was purchased completely as is, however, we did have a general inspection contingency. What was missed, even by a competent inspector, was the fact that there was no water meter. The house had been severely damaged by fire and restored, but it looks like they may have restored the plumbing in the basement and never had a new water meter installed! How did this come up? We had called the water company for a final water reading and found out where the meter should have been - no meter. So, at closing there was a hefty escrow taken to assure that the water bills and meter situation will be cleared up before being turned into the buyer's name. You learn new things all the time - don't think I've ever seen an inspector look for meters.
But I am straying from the point of this post - the fact that there was a general inspection in lieu of a normal home inspection contingency and what that differece actually is.
In a nutshell, the difference between a home inspection contingency and a general inspection contingency is that on a home inspection you can do your inspection and present a "laundry" list of items for the seller to repair or negotiate. Here in Maryland, electrical, mechanical and plumbing are "must fix" items on a home inspection. Outside of that, if there are other items found, such as broken windows, structural irregularities, broken or clogged gutters, cracks in the sidewalks, any number of things, you can ask for them to be remedied or ask for a dollar amount credit to take care of them youself. If you buy a home "as is" - typically an estate, a foreclosure, a very low selling price, a foreclosure, or bank owned, you can put a general inspection clause into the contract. This allows for you to bring in a home inspector but does not allow for you to seek repairs - even the "must fix" items as they are also excluded from most general inspection clauses. What it does allow you is an "out" of the contract with no penalty. If the inspection turns up too many items or items of real concern such as structural, you can declare the contract null and void and your earnest money deposit is returned to you.

Here's a little hint - even on an "as is" sale, even with a general inspection, that will not preclude you from presenting an addendum to the contract asking for a reduction in price or that an allowance be made for some repairs - the seller can just say forget it. In reality, if the request is justified or founded, it is in the seller's best interest to make some sort of concession - the house has now been off the market for a time (even if it's only a week), and they have been made aware of defects that they must now, by law, disclose to any new potential buyers. Sort of like being caught between a rock and a hard place

So, just a word to the wise - whether buying or selling - "as is" is not always as is and can potentially create problems!



BE INFORMED AND CHECK BACK HERE OFTEN!