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Does “As Is” REALLY Mean Exactly as it is?

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Economic downturns

Throughout the course of my career in real estate, I have weathered several economic downturns. Each time there is a backlash of foreclosure market business, which isn’t necessarily a bad thing (especially if you are an investor).

I have been on both sides of representation, both working with the lenders as an REO agent and as a buyer’s agent for buyers looking for a deal.

Every bank owned property is listed in “as is, where is” condition. The lenders intend that the buyer should be aware that any inspections or investigation of the property is for edification only and will not result in repairs or compensation.

Lenders WILL participate

While it is true that most lenders will not participate in any form of credits at closing, it has been my experience that they WILL in fact participate in repairs to the property when asked.

I understand that every state has different laws and procedures, so this is just my experience in Massachusetts. Please contribute via comments on your state and the practices that you have experienced.

Especially over the last year and a half it has been my practice to at least ask for inspection items on foreclosure transactions and I have yet to be turned down.

Surprised? I was!

For example: a home in Springfield, MA that my buyer was purchasing had carpenter ants, plumbing issues and a broken window. The buyer was a single woman buying her first home and wasn’t comfortable with acquiring these repairs. After informing her that the bank had disclosed their “as is” standing, she asked me to submit a request for all of the items to be repaired prior to close.

I was certain that we would get a negative response to most if not all of the requests. Imagine my surprise when they said yes to all!

My point here is that it doesn’t hurt to ask. Inform your client that it is a long shot and that they will most likely say no, but submit the reasonable requests that you would submit on any other transaction. Then come back here and share with us if your experiences match mine!

Lesley offers 21 years experience in real estate, public speaking and training. Lesley has a degree in communications and was the recipient of an international award for coordinating media in real estate. In the course of her career Lesley has presented at international real estate conferences and state REALTOR associations, hosted a real estate television program, written articles for trade magazines and created marketing and PR plans for many individuals, companies and non-profits.

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20 Comments

20 Comments

  1. Morriss Partee

    September 18, 2009 at 10:58 am

    Wonderful to learn about the power of asking! After all, there’s nothing to lose in this type of situation.

  2. Missy Caulk

    September 18, 2009 at 12:32 pm

    Lesley, we have had banks make repairs too. Not all the time but some of the time. No harm in asking.

  3. Lesley Lambert

    September 18, 2009 at 1:36 pm

    So you want to buy a foreclosure home? Does "as is" really mean "as is"? https://bit.ly/4imr1R

  4. J. G. Keating

    September 18, 2009 at 1:38 pm

    Lesley,

    Whenever we deal with a bank/lender we know and that’s local they will generally do it. But it’s good to know that it’s worth asking outside lenders too.

    Thanks for the info and do that from now on……

    🙂

  5. Lesley Lambert

    September 18, 2009 at 1:39 pm

    #twitterqueens I would love your input here: https://bit.ly/ybZRU

  6. Morriss Partee ?

    September 18, 2009 at 2:56 pm

    @LesleyLambert Aaaaaaaahhhhhhhh There it is on AR at last! https://bit.ly/TtUau

  7. Real Estate Feeds

    September 18, 2009 at 3:07 pm

    Does “As Is” REALLY mean exactly as it is?: Dont be stingy with your thoughts- stop by and comment!T.. https://bit.ly/SvDYx

  8. Ken Brand

    September 18, 2009 at 3:07 pm

    Don’t “ASK”, you don’t “GET”. Can’t hurt. If the answer is “no”, you’re simply in the same place you were before, no harm, no foul.
    Cheers.

  9. RealEstate Babble

    September 18, 2009 at 3:27 pm

    AgentGenius: Does “As Is” REALLY mean exactly as it is? https://bit.ly/qw67v Full https://bit.ly/sFmT0

  10. Rebound Management

    September 18, 2009 at 3:42 pm

    "Does As Is REALLY mean exactly as it is? | Real Estate Opinion …" https://tinyurl.com/mbqku2

  11. Memphis Real Estate

    September 18, 2009 at 5:00 pm

    From the RE.net – Does “As Is” REALLY mean exactly as it is? | Real Estate Opinion MAG – AgentG.. https://bit.ly/29Q3ol

  12. Connective Realtor

    September 18, 2009 at 5:42 pm

    RT @LesleyLambert: My linky is all fixy now: did you read my blog on "as is" sales in foreclosures?[Just did, very good] https://bit.ly/TtUau

  13. John Mulkey

    September 18, 2009 at 8:27 pm

    Will banks make repairs even when they offer "as is"? https://tinyurl.com/mbqku2

  14. Arbor Search

    September 18, 2009 at 9:01 pm

    https://www.arborseo.com Does “As Is” REALLY mean exactly as it is? | Real Estate Opinion … https://bit.ly/n5WWJ

  15. Atlanta Real Estate

    September 20, 2009 at 11:34 am

    In GA, our contracts are all as-is unless you include the financing contingency, appraisal contingency, right to request repairs, and anything else you are interested in.

    We use a Due Diligence period, either along with those contingencies or w/o those contingencies. Whatever makes sense.

    The best way to think of as-is in GA is that it may be as-is, but you still get the opportunity to do all the inspections to determine what as-is IS!

    Then, you can ask for repairs, etc., but the seller is under no obligation to address them. If they don’t and they are deal breakers, you simply terminate the contract under the due diligence clause.

    That’s GA anyway. Pretty simple.

    Rob in Atlanta

  16. LesleyLambert

    September 21, 2009 at 1:01 pm

    Thanks for your input everyone! It is always good to be pro-active, IMHO!

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Economic News

Is the real estate industry endorsing Carson’s nomination to HUD?

(BUSINESS NEWS) Ben Carson’s initial appointment to HUD was controversial given his lack of experience in housing, but what is the pulse now?

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NAR strongly backs Dr. Carson’s nomination

When President-Elect Donald Trump put forth Dr. Ben Carson’s name as the nominee for Secretary of Housing and Urban Development, NAR President William E. Brown said, “While we’ve made great strides in recent years, far more can be done to put the dream of homeownership in reach for more Americans.”

At the time of nomination, the National Association of Realtors (the largest trade organization in the nation) offered a positive tone regarding Dr. Carson and said the industry looks forward to working with him. But does that hold true today?

The confirmation hearings yesterday were far less controversial than one would expect, especially in light of how many initially reacted to his nomination. Given his lack of experience in housing, questions seemed to often center around protecting the LGBT community and veterans, both of which he pledged to support.

In fact, Dr. Carson said the Fair Housing Act is “one of the best pieces of legislation we’ve ever had in this country,” promising to issue a “world-class plan” for housing upon his confirmation…

>>>>>Click to continue reading…<<<<<

#CarsonHUD

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Economic News

Job openings hit 14-year high, signaling economic improvement

The volume of job openings is improving, but not across all industries. The overall economy is improving, but not evenly across all career paths.

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Job openings hit a high point

To understand the overall business climate, the U.S. Labor Department studies employment, today releasing data specific to job vacancies. According to the department’s Job Openings and Labor Turnover Survey (JOLT) for April, job openings rose to 5.38 million, the highest seen since December 2000, and a significant jump from March’s 5.11 million vacancies. Although a lagging indicator, it shows strength in the labor market.

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The Labor Department reports that the number of hires in April fell to 5 million, which indicates a weak point in the strong report, and although the volume remains near recent highs, this indicates a talent gap and highlights the number of people who have left the labor market and given up on looking for a job.

Good news, bad news, depending on your profession

That said, another recent Department report notes that employers added 221,000 jobs in April and 280,000 in May, but the additions are not evenly spread across industries. Construction jobs rose in April, but dipped in professional and business services, hospitality, trade, and transportation utilities. In other words, white collar jobs are down, blue collar jobs are up, which is good or bad news depending on your profession.

Additionally, the volume of people quitting their jobs was 2.7 million in April compared to the seven-year high of 2.8 million in March. Economists follow this number as a metric for gauging employee confidence in finding their next job.

What’s next

If you’re in the market for a job, there are an increasing number of openings, so your chance of getting hired is improving, but there is a caveat – not all industries are enjoying improvement.

If you’re hiring talent, you’ll still get endless resumes, but there appears to be a growing talent gap for non-labor jobs, so you’re not alone in struggling to find the right candidate.

Economists suspect the jobs market will continue to improve as a whole, but this data does not pertain to every industry.

#JobOpenings

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Economic News

Gas prices are down, so are gas taxes about to go up?

Do low gas prices mean higher gas taxes are on the way? Budgeting for 2015 just got a bit more complicated, if some politicians have their way.

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Gas taxes and your bottom line

Many industries rely heavily on time in their vehicle, not just truck drivers and delivery trucks. Sales professionals hop in their vehicles throughout the day, as do many other types of professionals (service providers like plumbers, and so forth). For that reason, gas prices and taxes are a relevant line item that must be budgeted for 2015, but with politicians making the rounds to push for higher gas taxes, budgeting becomes more complicated.

Gas prices are down roughly 50 cents per gallon compared to a year ago, which some analysts say have contributed to more money in consumers’ pockets. Some believe that this will improve holiday sales, but others believe the timing is just right to increase federal taxes on gas. The current tax on gas is 18.40 cents per gallon, and on diesel are 24.40 cents per gallon.

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Supporters and opponents are polar opposites

Supporters argue as follows: gas prices are low, so it won’t hurt to increase federal gas taxes, in fact, those funds must go toward improving our infrastructure, which in the long run, saves Americans money because smoother roads mean better gas mileage and less congestion.

Gas taxes have long been a polarizing concept, and despite lowered gas prices, the controversial nature of the taxes have not diminished.

While some are pushing for complete abolition of federal gas taxes, others, like former Pennsylvania Governor, Ed Rendell (D) tell CNBC, “Say that cost the average driver $130 a year. They would get a return on that investment” in safer roads and increased quality of life, he added.

The Washington Post‘s Chris Mooney points out that federal gas taxes have been “stuck” at 18 cents for over 20 years, last raised when gas was barely a dollar a gallon and that the tax must increase not only to improve the infrastructure, but to “green” our behavior, and help our nation find tax reform compromise.

Is a gas tax politically plausible?

Mooney writes, “So, this is not an argument that a gas tax raise is politically plausible — any more than a economically efficient tax on carbon would be. It’s merely a suggestion that — ignoring politics — it might be a pretty good idea.”

Rendell noted, “The World Economic Forum, 10 years ago, rated us the best infrastructure in the world,” adding that we “need to do something for our infrastructure, not in a one or two year period, but over a decade.”

Others would note that this rating has not crumbled in just a few years, that despite many bridges and roads in need of repair, our infrastructure is still superior to even the most civilized nations.

Regardless of the reasons, most believe that Congress won’t touch this issue with a ten-foot pole, especially leading up to another Presidential campaign season starting next year.

“I think it’s too toxic and continues to be too toxic,” Steve LaTourette (the former Republican congressman best known for his close friendship with his fellow Ohioan, Speaker John Boehner) tells The Atlantic. “I see no political will to get this done.”

Whether the time is fortuitous or not, and regardless of the positive side effects, many point to a fear of voters’ retaliation against any politician siding with a gas hike, so this matter going any further than the proposal stage is unlikely.

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