"As Is": The (Kind Of) New Normal for Virginia Real Estate

If you are buying or selling your Old Town home this year, you may notice that there have been some revisions to the regional sales contract.

It Depends on What the Meaning of "As Is" Is.

As of January 1, 2012, all properties in our region (VA, DC, MD) are now to be conveyed, or sold, "as is", with the buyer still having the option of the various inspection contingencies. While property in our area has always technically been conveyed "as is", the new contract no longer requires the seller to warrant the condition of the equipment, appliances or major systems, like air conditioning or plumbing.

What Does This All Mean?

For buyers, there is no need to panic.This is not a big change -- the "as is" is simply a starting point.

HOWEVER, this makes a home inspection more important than ever.  Buyers can and absolutely should make their offer contingent on a home inspection, and any other inspection they may want.  Based on the home inspection, buyers and sellers can then negotiate items that may need to be repaired or replaced.  A buyer can even ask for a credit toward those repairs.

What was wrong with the old contract?

While it seemed reasonable to have sellers warrant that their dishwashers, central air, plumbing and other systems were working, the language was a little hard to pin down. The appliances and systems were required to be in "normal working order" -- a subjective test at best. There was also room for various interpretations about whether an item or repair was required by the contract, and whether it had to be corrected.

Is the new language any better? If sellers and buyers end up with the same expectations and interpretations throughout the process, then the answer is a hearty yes.

Our Take Away

The bottom line is that if you are a buyer, now more than ever it is critically important that you get a thorough home inspection, as well as any other inspections you and your Realtor think may be important. Your offer should be contingent on the successful negotiation of that home inspection. Be reasonable and rational when choosing which repairs to request. Sellers, don't be offended by home inspection contingencies and repairs that a buyer may request. This is all part of the process.

Have any real estate questions?  Contact me at ginnybrz@me.com.

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