Florida As-is Contract: Template & Definition
If you are in the market for a new home, you may have seen listings on the MLS for “as-is” properties. You may be curious about what that term means - and whether it is a good idea to buy a house “as-is.”
When a property is sold “as-is,” the seller won’t make any repairs or reduce the price based on any defects that have been disclosed or discovered during inspection. A buyer can and should have an inspection performed to determine if buying the property is a good financial move. Generally, “as-is” houses can be a good deal, but it may be difficult or impossible to get a mortgage if the home has major issues such as a pest infestation or structural problems.
At Eaton Realty, we work with buyers, sellers, and property investors throughout Hillsborough County. We understand that “as-is” properties can often be a bargain and aren’t right for every buyer. If you’re looking for a house in West Central Florida, reach out to our experienced real estate team to learn more about your options.
What Is an “As In” Florida Real Estate Contract?
In a typical real estate transaction, after a potential buyer makes an offer on a house, they can do some due diligence. Due diligence typically involves a home inspection performed by a licensed inspector and an appraisal (usually ordered by the bank or mortgage lender). Based on the inspection and appraisal results, the buyer may ask the seller to make repairs, reduce the purchase price, or agree to other concessions.
If a home is being sold “as-is,” then the buyer must be willing to accept the home in its current condition. In other words, you won’t have the opportunity to ask the seller to reduce the price or make any repairs based on any problems that the property might have, such as a leaky roof.
A house may be sold “as-is” for the entire property or just one component. “as-is” for the entire property is exactly what it sounds like - the seller won’t make any repairs or reduce the price for any part of the property, whether it’s a minor issue or something major like structural problems. A seller may also make one property component - such as a pool that needs extensive repairs - “as-is.”
An “as in” real estate contract will typically contain legal language that alerts prospective buyers that the property is being sold in this manner. Examples include:
- “The Buyer acknowledges that the property is being sold ‘as-is’ with all faults and defects, whether known or unknown, presently existing or that may hereafter arise. The Seller makes no warranties or representations of any kind regarding the condition of the property;” or
- “By accepting the terms of this purchase and sale agreement, the Buyer agrees to purchase the above property in its as-is condition as of the closing date, with all faults and limitations;” or
- “Any repairs, renovations, or upgrades required by the Buyer after closing will be the sole responsibility of the Buyer. The Seller will not be held liable for any costs associated with improving the condition or function of the property.”
The property listing will explicitly state that it is being sold in “as-is” condition, noting that the buyer accepts full responsibility for any necessary repairs or renovations discovered before or after closing.
An “as-is” contract does not mean that the buyer must accept deficiencies, cannot have the property inspected or appraised, or will buy the house regardless of what an inspection may uncover. Instead, it means that the seller has already accounted for the property's condition in the purchase price or that they are unwilling to make any repairs or concessions.
If an inspection uncovers significant issues, the buyer can essentially take it or leave it. Their main options are to buy the house “as-is” or walk away from the sale. Of course, buyers can still ask the seller to make repairs or reduce the price if an inspection uncovers a defect that wasn’t obvious, such as mold or mildew issues - but the seller can refuse to do so and move forward with another purchaser.
Sellers offer their homes “as-is” for various reasons, which may include simply not having the time or desire to deal with property repairs. For example, consider a situation where a military service member stationed at MacDill Air Force Base is being deployed, and their spouse is selling the house and moving across the country to be closer to family. They know that their house needs a new roof, but they want to sell it quickly - and not spend the time or energy to find a contractor and get the work done. In this situation, the seller might discount the house price to account for the old roof and offer it “as-is.”
Importantly, selling a house “as-is” does not mean that a homeowner can hide or fail to disclose known defects. Florida law requires sellers of residential real estate to inform prospective buyers of facts that they are aware of and that might not be obvious to buyers, such as:
- For coastal properties, the potential for erosion and any environmental regulations that may affect the property;
- Information about homeowner’s association (HOA) fees, rules, and other details;
- Any pending code enforcement actions;
- Property taxes;
- Any legal complaints or disputes about the property;
- Whether the property is affected by past or present sinkholes;
- Any problems with structural or essential elements of the home; and
- Whether there have been any infestations or damage from wood-destroying organisms.
Again, “as-is” does not mean the seller can hide important details about the house. It simply means that, for whatever reason, the seller won’t be doing repairs - and that the buyer should be willing to accept the house in its current condition.
Should You Buy a House “as-is”?
Homes that are sold “as-is” often (but not always) need repair. They may even be unlivable in their current state, with major structural issues that make them unsafe or uninhabitable. For many buyers, this type of house is not an option.
First, many types of loans require that the property being purchased meets specific standards known as minimum property requirements (MPRs). For example, for loans backed by the federal government (such as an FHA, VA, or USDA loan), a home must generally have a roof in good condition, a working heating and cooling system, and an up-to-date electrical system. Similarly, conventional mortgages usually require only relatively minor defects to qualify for a loan - such as missing trim, minor window cracks, or worn floor finishes.
If a home is in truly poor condition, the likelihood of qualifying for a loan is incredibly slim. Unless you have the cash to buy the house outright (which may be possible if the price is low enough), then you probably can’t buy this type of property.
Second, many buyers don’t have the time or expertise to make more extensive repairs. Most people buy a house because they want to live there and may even need to move into the new property quickly. They may not be able to wait for several months or longer to make the repairs to make the home liveable. They may also not have the ability to make repairs or renovations themselves.
Of course, not all houses sold “as-is” are in poor condition. In some cases, the house is being sold as-is because the sellers don’t have the cash to make repairs or don’t have the time to get the work done. It is possible to buy a house as-is and then move in after closing and make repairs as you go. However, most of the houses on the market that are sold this way require significant work.
For anyone looking for an investment property, an as-is property can often be a great deal. If you have the ability to do so, you could buy a house on the cheap, put in some work, and then have a house with a significantly higher value. In fact, there is a whole genre of real estate shows on channels like HGTV based on this very premise - buying homes in bad condition “as-is” and then flipping them for profit.
If you are contemplating buying a house as-is, then a home inspection is a must. Only through a home inspection will you get a better picture of what is wrong with the house and the type of investment you will need to make to fix it. If a seller refuses to allow an inspection, then your best bet is probably to walk away from the deal - as that is a pretty clear sign that the seller is hiding something or that something is majorly wrong with the property.
Once you have an inspection done, you can make a more informed decision about how to proceed. In many situations, the price of the home may be low enough to make it a good deal, even with the necessary repairs. You should carefully consider the listing price, the defects in the property, and how much it will cost to fix those issues before coming to a decision. Your Tampa real estate agent can help you with the process.
Free as-is Contract Template
The team of realtors at Eaton Realty have created a free “as-is” contract template that can be used as a starting point if you’re interested in selling or buying a home as-is. You can download the free template by clicking the link below.
Keep in mind that this template is designed to be an example. We don’t recommend entering into any real estate contracts without first consulting a lawyer and a realtor.
How Eaton Realty Can Help
Buying or selling a house “as-is” can be a big decision. There are pros and cons to this option for all parties to a transaction. For buyers, it can be risky to buy a house with known problems. For sellers, it can mean a potential loss of profit on the sale of a home.
Eaton Realty represents both buyers and sellers in real estate transactions. We have more than 20 years of experience in the Tampa real estate market, which includes specific experience with as-is home sales. We can help you make the best decision based on your situation, using our knowledge and insight into these types of sales.
If you want to buy or sell a house in Hillsborough County, we are here for you. Learn more by filling out our online contact form, or call us at 813-672-8022 to talk to a real estate team member.
Rebecca Kelly
Director of Sales | REALTOR | MRP, GRI, ABR
Rebecca is a Realtor and the Director of Sales at Eaton Realty. She has been helping Hillsborough County residents buy and sell homes for over a decade. She has earned the Military Relocation Professional, Graduate REALTOR Institute, and Accredited Buyer's Representative designations from the National Association of REALTORS. Rebecca covers a variety of topics related to buying and selling a home on the Eaton blog. You can find her on LinkedIn.
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