'As Is,' Clause for Caution

Tracey Longo believes her home sales were speedy in part because she marketed the properties in "as is" condition. (Marvin Joseph -- The Washington Post)

"You never know what you're going to find in a home. There can be sleeping elephants all throughout the house," Rooney said. "Even if a contract is written as-is the buyer would be wise to execute a home-inspection clause. Possibly, what the inspection finds could kill the deal."

However, in the hot market of recent years, buyers have been agreeing to waive their right to home inspections to make their offers more attractive to sellers.

Charlotte Walker, a real estate agent with Coldwell Banker Residential Brokerage in Potomac, has seen this trend. When buyers finally find homes they like, they are terrified that they will lose them to competing offers. Many of them skip the home inspection to get the deal closed as quickly as possible.

"We don't think that's the greatest thing to do," Walker said. "We try to discourage that. But it's hard sometimes in a seller's market like this to convince buyers. They really don't want to lose the homes they like."

Jim Tobin, a real estate agent with the Fairfax office of Re/Max Premier, has seen the same trend.

"Most buyers know how important it is to get an inspection. But in the last year or two, because of the bidding wars we've had over houses, some clients have lost homes because of the home-inspection clauses they've requested," Tobin said. "So in desperation some buyers are taking them out. They are willing to run the risk of later on finding a problem. It's a risky tradeoff."

But what about sellers? Does placing those words "as is" in a listing slow a home's sale? Does it cause buyers to pause, wondering what is wrong with a home?

Not really, say real estate pros.

Traditionally, to get the highest value for their homes, sellers would spruce up certain areas to generate the highest possible sales price. Owners, for example, might replace dark kitchen cabinets with light ones. They might install bright new carpeting throughout a home's first floor.

But in today's seller's market, such moves rarely make financial sense.

"In our market the way it is today, it is often the buyers who want to take a home in as-is condition," Tobin said. "If you have a real old kitchen, say, it almost doesn't pay to fix it up. It's better to market it as ready for renovation. The people who purchase the home are going to have their own ideas on how they want their kitchen to look. They might not like the renovations you make."

Sellers who list their homes in as-is condition need not even set the price lower because of it, real estate experts say.

"There really is no financial damage done by listing a home in as-is condition," said Miller. "Buyers are used to that now. And they know they can protect themselves by having a home inspection. If I'm a buyer, the words 'as is' don't throw me. I know I can inspect the property."

Rooney, the home inspector, says sellers shouldn't fret when buyers order an inspection. These buyers, he says, are just doing their job. Most times, the defects an inspector uncovers won't scuttle a deal. Usually major problems are the only ones that cause potential buyers to run from a home that they liked enough to make an offer on, Rooney said.

"I'll see a deal die when the repairs would cost, say, 10 percent of the home's listing price," Rooney said. "That's a big deal. That's a big investment."

Before buying her house in Silver Spring, Longo took this approach. The sellers of her home were retiring to Florida, and though they were selling the property as-is, Longo could see that they had taken good care of the house. Longo proved this to herself by having a home inspector tour the property. The inspector found no major damages.

"No one was trying to fool anyone," Longo said. "It was more to get rid of all the haggling, nit-picky type of things that went on before the seller's market took hold. There are unsavory characters selling homes. That is true. They may try to hide something. That's why I'd never buy a house before having an inspection. At least that way, if you know you're going to have to replace the roof you'll be able to plan your home maintenance."