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  • When the Client Won't Accept the Property As-Is

When the Client Won't Accept the Property As-Is

June 11, 2018 | Texas REALTORS® Staff

My client won't accept the property “as is.” He wants to wait until after the inspection to list specific repairs that he wants the seller to fix. Can I leave both boxes in Paragraph 7D of the One to Four Family Residential Contract (Resale) blank, or can I check Paragraph 7D(2) and write in “repairs to be listed following inspections”?

Neither. Leaving both boxes blank in Paragraph 7D or altering the contract terms by adding language in Paragraph 7D(2) that does not list specific repairs could be considered to be acting negligently or incompetently if a complaint were to be filed in connection with the transaction.

The buyer should only choose Paragraph 7D(2) if he knows of specific repairs that he wants the seller to complete at the seller’s expense. Otherwise, the buyer should check Paragraph 7D(1).

Most buyers in this situation will also choose to pay a termination-option fee pursuant to Paragraph 23 in exchange for the right to terminate the contract for any reason within a negotiated number of days. During this termination-option period, an inspection can be performed, and if specific repairs are identified, the parties can negotiate to amend the contract to address these items, or the buyer can terminate the contract.

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C ALinda BennerStuart ScholerDIANA ALDERMANScott Billingsley Recent comment authors
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Gregory Knapp
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Gregory Knapp

You MUST explain the clear English meaning of the promulgated forms, and if it touches the RIghts of the client YOU MUST have them talk to a lawyer! Conveniently, most title companies have lawyers that will be willing to explain Rights, so have the Client pick one to call!

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1 year ago
Scott Billingsley
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Scott Billingsley

I get asked this question a lot on true “AS IS” properties and sometimes on “as presented” ones. In this particular case, the problem may not be so much with the buyer client as with the buyer agent. While the contract says that the buyer accepts the property in its as is condition, it really means that the buyer accepts the property “as presented” by the Seller. There should be made available prior to writing up an offer, a copy of the survey, a Seller’s Disclosure Statement and possibly any recent inspections. The buyer’s agent can contact the seller’s agent… Read more »

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1 year ago
Fred Michael
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Fred Michael

Yet, if the seller refuses to do any found repairs and the buyer has no alternative but to exercise their right to terminate, the buyer is out hundreds of dollars for the right to terminate and inspection cost and that does not protect the consumer.

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1 year ago
Scott Billingsley
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Scott Billingsley

Recently I sold one of my personal properties and the buyer’s agent, after negotiating down the price to where nothing was left on the table asked if the “as is” meant no repairs would be done. I told him that no repairs would be done for cosmetic items but things like termites, electrical and plumbing defects discovered would be done as once known, I would have to do them anyway. Apparently I lied as I ended up not only doing revealed plumbing and electrical problems but actually doing something that nobody recommended but the buyer thought “had” to be done… Read more »

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1 year ago
Rick DeVoss
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Rick DeVoss

This paragraph is totally in favor of the seller. It doesn’t “cost” the seller anything, because there are other buyers standing by. He actually gets paid when the buyer is forced to cancel the contract because he is truly NOT willing to buy the property “as is”, even though TREC is making him check that box. There needs to be a third option for the average buyer who will expect the seller to make reasonable repairs after the two of them see the inspector’s report. The buyer should have some assurance of the seller’s attitude toward making reasonable repairs prior… Read more »

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1 year ago
Scott Billingsley
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Scott Billingsley

Rick, Years ago our earnest money contracts had provisions for amounts for Seller repairs called repair allowances and we didn’t have a provision for an “Option Period” as we do today. Also, at that same time, sellers were not required to fill out a disclosure statement but of course, were required to disclose “latent” defects about the property. I can tell you that the contracts we have today are better, not perfect but better. The buyer can tie up a vacant home that costs the seller $20-well over $100 per day sitting there and for what? Less than a single… Read more »

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1 year ago
DIANA ALDERMAN
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DIANA ALDERMAN

It is unfortunate that we have the AS IS wording in our contracts without further explanation. In our company, we explain the AS IS as follows: “Buyer accepts the property AS IS only as of the effective date of the contract”. All Buyers should then complete Paragraph 23 (Option Period) in order to protect themselves from the AS IS clause. ————I think the wording should be: “As of the effective date of the contract, Buyer accepts the property AS IS.” In addition , unless the buyer is purchasing the property with the intention of razing it , Buyer should always… Read more »

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1 year ago
Stuart Scholer
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Stuart Scholer

I can’t believe that all these real estate professionals are crying about the “as is” box. The simplicity of this option along with the provision of the option period makes so much sense. You pay a little bit to play…. sometimes a buyer spends 4-$600 to figure out something is not going to work. Sometimes it is a surprise but usually a good Buyer Agent can spot a Listing that is at risk of an owner that wants to sell his house but “doesn’t want to fix anything or spend any money” to sell the property. In fact you can… Read more »

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1 year ago
Linda Benner
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Linda Benner

I was told that there are instances where, if a seller does not make the agreed upon repairs, the courts are sometimes ruling for the seller because the buyer checked they were accepting the property “as is”. That was news to me and is definitely a little scary. I wonder if there is a way we can verify that information.

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1 year ago
C A
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C A

It would be more helpful in the explanation to clients if the “option period” paragraph 23 (page 8) was adjacent to the “as is” (7 D 1&2 on pg 4). The distance between the two on the contract doesn’t make the most sense.

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1 year ago

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