I’m currently working with a young couple, helping them buy their first house. After looking around the whole Charleston area, they fell in LOVE with a house in North Charleston.
The house is bank owned. (a foreclosure)
On the surface, it appeared to be in amazingly fantastic condition. The appliances in the kitchen were brand new! They still had the owners manuals hanging on them. This is becoming a somewhat common practice. Banks know that kitchens help to sell houses and they seem to have forged strong relationships with Whirlpool as almost every bank owned house I show these days, has brand new Whirlpool appliances!
So we made an offer, did some back and forth negotiation, and quickly came to terms on a great price. All banks that sell foreclosed homes, insist on AS-IS clauses. Standard practice. You can still have inspections done and make the contract contingent upon it but don’t expect the bank to fix things….
We had an inspection and everything looked pretty good except the air handler for the HVAC system. That appeared to be shot! Not good… These things are very expensive! And no buyer would ever be able to purchase this house with an FHA loan. (FHA loans require the house to be in almost perfect condition)
It looked like we were going to have to pull out of the deal and move on.
As a last ditch effort, I made a plea to the listing agent. I let him know that the HVAC system required a new air handler. My buyers would not be able to purchase it since they were going with an FHA loan. BUT, it also meant that NO buyer could purchase the house and since it’s in the mid $150K’s it’s VERY likely that most future buyers would want to go this same route.
That puts the selling bank in an interesting position… They could be looking at being stuck with this house for a very long time. Disclosing the broken air handler to all future buyers and waiting for someone to purchase the house in cash as an investment….
My last ditch effort WORKED. We were able to get the bank to front the money to replace the air handler.
While more times than not, as-is WILL mean as-is, sometimes when it all comes down to selling a house now or waiting many more months to find a new buyer, sellers can be convinced to make certain repairs.