5 Things You Didn’t Know About Buying a Home Sold-As-Is
As a first time home buyer you might not know what you are getting into when buying your first home especially when its being sold-as-is. Here are 5 Things you didn't know about buying a home sold-as-is.
Most buyers envision a home that is move in ready where you can just add your furniture and be done. However if you are looking to save a buck or two. You might be interested in that fixer upper or estate sale to lower that is cheaper than being a habitable home. Well, please know that when you are looking for these options you might not know what you are getting into. So as they say "Buyer Be Ware".
Most real estate agents NOT all will tell you that a home sold-as-is basically has zero potential to ask for any types of credits or repairs but just know that you still can ask for that.
#1 Don't Ask for Repairs
There is there is a myth out there that because of homes being sold as is, you cannot ask for any type of repairs. You can actually ask for repairs. If the repairs are really big like roofing or foundation issues the seller might not give repair anything however if the repairs are minor some sellers do budge. You have to remember the motivation for a seller to sell maybe there are falling into a short sale situation or maybe it's a divorce that is happening. Most of the time when the seller needs to sell quickly they will do what they have to do. They might give you a repair or might not give you a repair. So, you got to try it out – the worst thing they can say is ‘No’.
#2 Don't Ask for a Credit
If the seller doesn't want to repair anything in the house especially the items that are on the home inspection report then the other option is asking for a credit. I recently had a client that got $3,000 repair credit, actually the seller ended up reducing the price by $3,000 because there were a lot of issues found at home inspection. Also, the seller's needed to sell fast because they had already bought another home so they were paying two mortgages.
There is a huge myth around asking for repair or a credit even though it’s sold as is. Make sure you talk to your real estate professional or your attorney when it comes to trying to get a credit with a home that is being sold as is. You might get a repair credit or even better a price reduction at the very least.
#3 Miscellaneous Cost - Transfer Stamps
There are so many cost involved when you are buying a home. One of them is called a "transfer stamp" this is normally is the responsibility of the seller to pay however when you are buying a home that is sold-as-is you need to be aware that this will fall on you.
According to wikipedia a transfer stamp is a "Real estate transfer taxes are taxes imposed by states, counties and municipalities on the transfer of the title of real property within the jurisdiction. ... Real estate transfer taxes can also be used for specific purposes, such as affordable housing and open space development"
In my own words its a tax that is imposed from owner to owner to show that state in which you are in that you are now the rightful owner of that particular parcel of land and property. The tax is imposed on the privilege of transferring title to real estate or a beneficial interest in real property that is held in my case in the state of Illinois.
Transfer taxes vary from city to city. As an example in Chicago the transfer stamps imposed are
Chicago Transfer Tax
|Area||Tax Levied||Paid By|
So in this case you as a buyer will be responsible to pay for your portion of transfer taxes and the seller's piece because the home is being sold-as-is.
So, make sure you check that out because you will be responsible for that money and that’s out of your pocket. Talk to your attorney and your real estate professional about transfer stamps.
#4 Past HOA Fees
If you are thinking about buying a condo make sure you are familiar with paying for past HOA (Home Owner's Association) fees. This will will apply if you are buying a foreclosure or a short sale since they are being sold-as-is you will be responsible the last 6 months’ worth of homeowner’s assessment fees. Be careful with this.
Here is an article from the Chicago Tribune stating what I said above. If you look at the Illinois Property Condominium Act (765 ILCS 605/) Condominium Property Act, section 9(g)(3) states the following:
#5 Buyer Just Beware
Home buyer beware – there’s a lot of risks when you’re buying home sold as is, so make sure you do that home inspection especially because the home inspector will be looking at big components as electrical, roofing, foundation, etc. A home inspection typically cost between $300-$550 depending on the square footage of the home. It's best to spend this amount and know you are getting a solid home with minor defect then to find out you have a money pit.
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