What Does "As-Is" Mean in an MBR Real Estate Contract?

 Posted on July 29,2024 in Real Estate

Buying real estate, particularly a home for your family, can be exciting and terrifying, all at the same time. When you have looked long and hard and finally found a home that fits the needs of your family as well as your budget, you may skim over the words "as-is." In some cases, that may not be a problem, but in others, you could find yourself on the wrong end of months or years of expensive repairs.

If you are looking to buy an Illinois home, it is a good idea to have an experienced real estate attorney by your side to help ensure no mistakes ruin your pleasure in your new home. A Yorkville attorney with significant knowledge regarding buying real estate will guide you through the process in the best way possible.

What Does "As-Is" Mean in a Multi-Board Residential Real Estate Contract?

The Multi-Board Residential Real Estate Contract is the standard contract for buying residential real estate in Illinois. Real estate sales without an as-is clause are governed by Illinois real estate disclosure laws. If your real estate contract has the term "as-is" written in, this means you must be willing to accept the home in its current condition.

As the buyer, those two little words mean you may not ask the seller to reduce the price of the home based on problems or make any repairs. A contract without the term "as-is" means that repairs and negotiations are not only possible but they are also likely. When a home is sold as-is, the following are true:

• As the buyer, you are assuming the risk for any potential post-purchase issues.
• The price for an as-is property is usually fixed, with little negotiation room.
• While a buyer can request an inspection of an as-is property, the seller is not required to perform repairs.
• To ensure you are clear about all aspects of the as-is contract, legal advice is essential.

An as-is contract usually includes:

• A detailed description of the property
• The price agreed upon for the property
• A date when the sale will be finalized (closing date)
• A seller’s disclosure that contains any known issues the seller chooses to disclose
• Provisions and conditions for a buyer’s inspection
• Details regarding title search and insurance and the deed transfer
• Dispute resolution provisions
• Any specific legal protections agreed to by both parties  

Does "As-Is" in a Contract Cover the Entire Property?

Although the entire property could be covered by the as-is clause, in some cases, only one or more specific issues are covered. Suppose the seller is aware that the roof in the sunroom has developed a minor leak over the past month or so but does not have the time or money to have the roof repaired and ensure there is no resulting mold. The contract might state that there is a leak in the sunroom and that they have no idea whether the leak has caused damage, so that portion of the house is being sold as-is. It is important that, as the buyer, you are absolutely clear on whether "as-is" covers the entire property or only certain parts.

Contact a Kendall County, IL Real Estate Attorney

Buying real estate is a big decision that warrants extra consideration when you are buying a property being sold as-is. Even though you may be getting a significantly lower price tag, you must determine whether that will compensate for any deficiencies the property may have. While there may be some room for negotiation in an "as-is" real estate contract, it is usually fairly limited.

Your flexibility may only extend to the timeline of the sale and other, more minor issues. When you have a knowledgeable Yorkville, IL real estate attorney from Gateville Law Firm helping you navigate a real estate sale, you can be sure you will have a thorough understanding of what you are purchasing and whether you have any recourse for problems down the road. To schedule a free consultation, contact Gateville Law Firm at 630-780-1034.