Listing a property “as is” introduces a specific array of factors for buyers, sellers, and their representing real estate brokers.
The phrase might appear simple, but it carries complex and significant meanings. Real estate attorneys are key in shedding light on these subtle details, equipping brokers with the knowledge to navigate their clients confidently and transparently through such transactions.
In this blog post, we delve into the crucial ways real estate attorneys provide essential counsel to brokers and their clients concerning “as is” property sales.
The Essence of “As Is” in Real Estate
Selling a property “as is” means the seller offers the property in its current state without agreeing to make repairs or improvements.
This term indicates that the seller will not address any defects present at the time of sale. However, this designation doesn’t absolve sellers from the responsibility of disclosing known issues with the property. The statute requires disclosure unless the seller has repaired the problem and has no further reason to believe that the problem exists. If the problem arises again after the sale of the property, that “belief” can be sorely tested.
How Real Estate Attorneys Aid in Understanding “As Is”
Clarifying Legal Implications for Sellers:
Real estate attorneys can help sellers understand their obligations under an “as is” sale.
Though the seller is relieved from making repairs, they must still adhere to disclosure laws. While we usually expect that the seller is not exempt from addressing health and safety issues, the “as is” provisions of the 7.0 contract does not require those repairs, and in fact excludes the language provided in the inspection paragraph that would allow for it. In addition, health and safety issues are not addressed in the 7.0 contract at all and have simply become a standard requested “ask.”
Attorneys ensure sellers are aware of what needs to be disclosed to avoid legal repercussions post-sale. Failure to Properly Disclose litigation can be costly and time consuming.
Assisting Buyers with Due Diligence:
For buyers, purchasing an “as is” property can be daunting.
Real estate attorneys can guide buyers through thorough due diligence, advising on the extent of inspections and helping interpret their findings. After that, the advice is limited to allowing the client to go forward with the transaction or terminating the transaction and assuring that the termination is within the timeframes allowed. Sometimes, advising seller’s counsel that the transaction will be terminated because of the condition of the property can prompt a negotiation for repairs or a credit, but that is not required.
Facilitating Transparent Transactions:
Real estate attorneys try to ensure that all known defects are properly disclosed, aiding brokers in maintaining transparency throughout the transaction. This transparency is crucial in building trust and avoiding disputes between buyers and sellers. Failure to properly disclose known problems can prompt litigation after the closing, notwithstanding the fact that the property was sold “as is.”
Navigating Complex Negotiations:
Real estate attorneys need to be adept at managing negotiations involving “as is” properties. They can provide advice on how to approach offers and counteroffers, keeping the property’s actual condition and market value in mind.
Strategies for Brokers in “As Is” Transactions
Brokers play a crucial role in transactions involving “as is” properties. Here’s how they can leverage the expertise of real estate attorneys to facilitate these deals:
Educate and Prepare Clients:
Brokers should inform their clients about the nature of “as is” sales and the importance of legal counsel. Educating clients on the need for thorough inspections and legal review can prevent misunderstandings and post-sale disputes.
Encourage Professional Inspections:
Urge buyers to invest in comprehensive property inspections. Real estate attorneys can then review these reports and advise on any potential legal or financial implications.
Seek Legal Insights for Contract Terms:
Collaborate with real estate attorneys to understand the nuances of the purchase agreement, especially clauses related to the “as is” condition. This understanding can help you advise your clients more effectively.
Advocate for Informed Decision-Making:
Encourage clients to consult with real estate attorneys to fully understand the financial and legal aspects of their decision. This counsel is invaluable in ensuring that buyers make informed choices and that sellers comply with all legal requirements.
By understanding the intricacies of “as is” sales and leveraging the expertise of real estate attorneys, you can successfully guide your clients through these challenging transactions.
The Minchella & Associates Difference
With over 40 years of experience in Illinois real estate law, Erica Minchella has represented thousands of home sellers and buyers, landlords, and commercial and investment property owners. For more information, schedule a consultation today.
