I have often wondered why agents, listing agents like the “as is” we know why sellers like it or at least they think they know why they like it. I think if they really understood the”as is” they would rarely use it.
Having been involved with commercial real estate I can tell you all large transactions are “as is” reason, buyer begins with a letter of intent and usually once the price is agreed to the inspection or due diligence period begins. The reason why the buyer likes the “as is “, they may have several other offers or letters of intent floating around on different properties. The buyer uses this clause as an escape if necessary, which is frequently exercised and at best uses this clause to reopen the negations on price and terms again.
In the residential market the limitations is placed in the purchase and sale agreement to make it become a binding contract on both parties, not to provide a loophole or to reopen the negotiation. Remember the March 27 blog (see link below) on negotiation and why these time frames and limits are placed in the contract. Home buyers are not as sophisticated and have a hard time understanding the difference, for that matter most agents, and inexperienced attorneys don’t understand it. When a listing agent suggests to the seller to use an “as is” he has just taken all the sellers rights regarding inspections and given it to the buyer. A true “as is” clearly states that the buyer may cancel for any reason. With the limitation clause you are almost guaranteed a closing because few inspections exceed the limit, but should it exceed the limit either party may pay the difference. That’s fair it keeps your deal alive.
Guys all the sellers really want to do is sell their property don’t make it any more complicated than it has to be. Think about it guys, seller has been trying to sell for 6 months, gets offer and buyer cancels for some ridiculous reason like a squeaky door. With the limitations there is no out, if it exceeds, seller has the right in fact, either party has the right to repair and the contract remains in full force and effect. By the way in our market today the seller is always going to cure the defect if he is serious about selling. So why give the buyer an easy out just because he found another home or just plain got cold feet.
Listing agents protect your sellers and not give the buyer an out, you’ll close more deals and that’s what it is all about.
I know allot of you agents will disagree, think about it and share your thoughts with us.
Having been involved with commercial real estate I can tell you all large transactions are “as is” reason, buyer begins with a letter of intent and usually once the price is agreed to the inspection or due diligence period begins. The reason why the buyer likes the “as is “, they may have several other offers or letters of intent floating around on different properties. The buyer uses this clause as an escape if necessary, which is frequently exercised and at best uses this clause to reopen the negations on price and terms again.
In the residential market the limitations is placed in the purchase and sale agreement to make it become a binding contract on both parties, not to provide a loophole or to reopen the negotiation. Remember the March 27 blog (see link below) on negotiation and why these time frames and limits are placed in the contract. Home buyers are not as sophisticated and have a hard time understanding the difference, for that matter most agents, and inexperienced attorneys don’t understand it. When a listing agent suggests to the seller to use an “as is” he has just taken all the sellers rights regarding inspections and given it to the buyer. A true “as is” clearly states that the buyer may cancel for any reason. With the limitation clause you are almost guaranteed a closing because few inspections exceed the limit, but should it exceed the limit either party may pay the difference. That’s fair it keeps your deal alive.
Guys all the sellers really want to do is sell their property don’t make it any more complicated than it has to be. Think about it guys, seller has been trying to sell for 6 months, gets offer and buyer cancels for some ridiculous reason like a squeaky door. With the limitations there is no out, if it exceeds, seller has the right in fact, either party has the right to repair and the contract remains in full force and effect. By the way in our market today the seller is always going to cure the defect if he is serious about selling. So why give the buyer an easy out just because he found another home or just plain got cold feet.
Listing agents protect your sellers and not give the buyer an out, you’ll close more deals and that’s what it is all about.
I know allot of you agents will disagree, think about it and share your thoughts with us.
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