"AS IS" ADDENDUM Saved My Client From Making A Bad Investment and Made Me Look Like A Hero!

By
Real Estate Broker/Owner with Van West Realty - Greenville, SC Realtor -Short Sale Expert!

I would like to share a recent experience that relates to the use of a standard "As Is" Addendum that was submitted with a recent offer to purchase from one of my clients.

The simple choice to use this form afforded additional comfort for my clients, and strengthened the trust and confidence within our Realtor-Client relationship!

The house they were attempting to purchase was a brand new construction, custom built home. It seemed to be beautiful, but it was in fact wrought with problems and complications. The builder ran out of money and never finished the house. In fact, many things that appeared to be finished were actually done quite poorly.

While we were told by the selling agent that about $15k would take care of any outstanding issues with the home, my clients paid for a home inspection which revealed a totally different story. Things were much worse than my clients thought. They were facing a minimum of $25k or more that was needed just to make the home livable.

Along with the offer to purchase, we included the "As Is" Addendum and chose the option at the bottom of the page which includes the following:

"Buyer shall have _____ calendar days from the effective date of the contract to conduct such inspections and/or tests as buyer deems necessary (the "due diligence period"). Prior to the expiration of the due diligence period, buyer shall  have the unilateral right to reject the condition of the property and terminate the contract upon written notice to Seller or Seller's agent..."

 Boy, was this As Is Addendum important to my clients after they paid for and received the home inspection!

 The extra work that the inspection report revealed and the estimated costs to complete such work simply scared off my clients from wanting to continue with the purchase of this particular home.

Yes, I know, we could have written in a simple contingency regarding a "satisfactory inspection". However, after educating my clients as to the various ways we could address this topic, the As Is Addendum standard form offered a superior level of protection and ultimately added comfort for my clients. That comfort level they felt and the professionalism I conveyed by explaining all the details and options went a long way in gaining their long-term trust and appreciation!

When I told my clients that I had their best interests at heart...I meant it and I proved it!

 

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Rainmaker
130,809
Bill Exeter
Exeter 1031 Exchange Services, LLC - San Diego, CA
1031 Tax-Deferred Exchange Expert
Way to take care of your clients!  They will be clients for life.
March 28, 2008 12:28 AM #1
Rainer
62,962
Ken Horst
MLS Maps, Agentopolis, Tweet Me Homes - Minneapolis, MN

I can't imagine a buyer waiving their right to inspection whether it be a new home or a home that is 75 years old. 

I'm sure your clients were happy with their legal ability to "walk away"

March 28, 2008 12:28 AM #2
Rainer
179,085
Erik Hitzelberger
RE/MAX Alliance - Louisville REALTOR-Luxury Homes - Louisville, KY
Louisville - Middletown Real Estate

Kirk - I don't have inspections on investment properties that I buy but I strongly recommend that all of my clients do so especially if they plan to live in the property.  It is too easy to overlook something that a trained inspector will find. 

March 28, 2008 12:38 AM #3
Ambassador
1,332,802
Jon Zolsky, Daytona Beach, FL
Daytona Condo Realty, 386-405-4408 - Daytona Beach, FL
Selling Daytona paradise for heavenly good prices

Guess every state is different. We use As Is contracts here only on condominiums, condo-hotels and REOs and Short sales.

If I represent a buyer, I would only go with a standard contract, as it gives a better protection for the Buyer.

But it is obvious that your situation is different.

March 28, 2008 12:57 AM #4
Rainmaker
1,198,809
Tony & Darcy Cannon
Keller Williams Legacy - Woods Cross, UT
The C Team
Kirk, good job!  We also have an "as is" addendum that is an approved form for our use.  I will say that here, it protects the seller moreso than the buyer.  Your story is also a good testament of why a home inspection is always needed.  We have paid for them for our homes, my father was a carpenter and my father in law is a contractor.  It is just a good thing to have!  Once again, the value of a good Realtor shows forth, good post!
March 28, 2008 01:37 AM #5
Rainer
88,169
Jean Powers
Kane & Associates call 510.908.9002 - Alameda, CA
CRS,e-PRO,HAFA,SFR Broker, Northern California
Interesting, in CA, our contracts for SFR 1 to 4 units include the  "as is" paragraph subject to inspections. Removing all contingencies up front with the purchase agreement is only way buyers can purchase "as is" . That did happen during the seller's market and buyers purchased properties without knowing the defects of the property and that was crazy!
March 28, 2008 01:43 AM #6
Rainmaker
408,322
Bill Kennedy
Keller Williams Realty - Greenville, SC
Homes For Sale Greenville SC
Those addendums sure can be life savers... and you probably earned some future referrals from the client.  Good job.
March 28, 2008 08:22 PM #7
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Kirk Westervelt

Kirk Westervelt, Broker In Charge, Van West Realty - CDPE - Short Sale Agent - Home for Sale - Greenville, Simpsonville, SC
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