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What Does an as-is Home Sale Mean?
What does an as-is home sale mean? It depends on whom you are talking to. Our California Residential Purchase Agreement says the home seller is not obligated to make any repairs to the home she is selling. Unfortunately, some buyers and agents think this is a time to renegotiate. A seller can say no, of course, but if she wants the sale to go through, she may reluctantly agree.
If a seller says no dice, take it or leave it, the buyer can then walk away. We then start over looking for a buyer. The process of inspections can be grueling on a rural property. For example, some cities will force you to hook up to city sewer lines. That can be so expensive. Sometimes costs could be $50,000. Always a good idea to check septics and wells, and local requirements.
Home inspections on older properties often point out all kinds of things. Of course, as these are old properties, remember, you are not reinventing the wheel here. If a seller hasn’t fixed the items during the years they have owned the property, do you think they are going to love the idea of repairing things that they lived with for years? These older homes have miles on them — just like an old car, it may run but burns oil and the front end shakes.
Always a good idea to educate buyers to remember if they negotiated dollars off the list price, then assume that was your repair credit. So what does an as-is home sale mean? The answer, all depends on whom you are talking to, lol. I think it is important to do all your inspections so you can decide if the property is right for you.
If you want to buy or sell real estate, call Weintraub & Wallace Realtors with REMAX Gold. We can be reached at 916-233-6759.
— JaCi Wallace
A Fixer Home Selling As Is In a Probate Process
Today we would like to discuss a fixer home selling as is in a probate process. This was a recent sale on a listing where the seller was a “probate administrator with full authority.” I could write a book on selling probate listings but, I will stick to the as is portion of this sale as it is most interesting yet often confusing for buyers. From the photo you can see the exterior condition. There were also interior issues.
The seller left behind quite a bit of personal property in the interior, which we had to deal with. Also, due to dust, molds or other issues, these listings can require Hazmat.
Probate properties are sold as is, as a general rule. Also, sellers must declare if there was a death in the property within the past 3 years. To show a property in this condition, a seller may have to do some type of remediation prior to us marketing the property. So, this property had some remediation work completed before going on the market.
Also, as the seller had passed away, his payments had gotten behind so the property was in foreclosure. The foreclosure process, once a Notice of Default (NOD) is filed, is public record. We can tell if a home is in foreclosure because the NOD is shown on the tax profile (most of the time).
In this situation, we had a very short window to cure the loan default, so acquiring a hard money loan became urgent. I know several companies that do hard money loans but they usually require a minimum loan of $75,000 – $100,000. This property needed less funds and these are expensive loans with fees based on loan amount. Fortunately, I know a source for this type of loan. In fact, this particular hard-money lender used to flip homes. That company was willing to loan this estate the funds to pay off the delinquent liens and cure the foreclosure action.
The buyer was very committed to purchase the property. Also, the buyer’s agent was familiar with the area. She knew the importance of buyer’s inspections such as a well and septic. During the inspection process, a local company inspected the septic and found it was not working. They had to additionally bring in a backhoe. Further complications, it had been snowing at this elevation and there were very icy road conditions. A backhoe was not easy to arrange. The extent of the repair was extensive and the estimate, expensive. The even larger looming issue was it could be months before the work on the septic could be completed due to weather. Would the buyer move forward with these issues?
This defective septic system was a surprise to everyone. The estate attorney, the professional fiduciary, and the heir were all informed. I suggested a credit be considered as it was the request of the buyer’s agent. The reason for this credit was to encourage the buyer to continue forward with the purchase, in lieu of cancelling. The parties all agreed a credit was in order to provide a close of escrow as soon as possible. An immediate closing would prevent the estate from incurring any further costs or any other expensive surprises. With the winter weather conditions, a hard money loan due in one year, a septic that may not be operational for months, and property insurance issues, we needed to close asap.
Oh, yes, I forgot to mention the insurance challenges. The seller researched many insurance companies. Dealing with a very high fire rating for the area and an unoccupied property, these two items prevented most insurance companies from providing full coverage. A California basic fire policy was obtained to prevent a major loss from fire. Due to all of the recent California forest fires, all agreed there was immediate need for fire insurance to be in place. This is all part of listing a fixer home selling as is in a probate process.
We finally closed escrow and the buyer was thrilled to own the property. The buyer’s agent did a good job of completing inspections and keeping her side of the transaction moving forward. The probate attorney was fabulous to work with, too. In fact, we sold the property with all the personal property inside, including a truck and a trailer in the yard. The attorney completed all the additional documentation for the personal property to be included in the sale, without warranty expressed or implied. The professional fiduciary and her team were top notch, I cannot say enough kudos about their expertise.
As you can see, this was not a traditional real estate sale, this was a probate. Being declared an Expert Witness in probate court, I am often selected to work on very complicated cases. This is because I have been selling probate properties for over 10 years. It is a sub-specialty practice I enjoy. Closing a fixer home selling as is in a probate process is no easy task. Expertise counts here as mistakes are not tolerated within the probate court. Everyone is expected to complete their official duties in a professional and competent manner.
If you have a potential probate sale, a successor trustee sale, a conservatorship sale or a traditional real estate re-sale home, you can feel confident in the Weintraub & Wallace team to close the escrow. We are a solution-based team. Call us today at 916-233-6759.
— JaCi Wallace
The Lost Art of Pie in the Face
The movie studios don’t really make slapstick comedies anymore and I miss that kind of humor, unless you count the world of Sacramento real estate — in which one can almost always find a highly amusing moment as there are so many to choose from. I kinda like slapstick because I grew up with it, not to mention, it gave me a good excuse to whack my brother’s face for no reason. I laugh at pie in the face from the old Soupy Sales skits. Don’t get me started on the Marx Brothers or the Three Stooges. But today so much is PC you don’t get that kind of humor from Hollywood or media.
Not that I’m against being PC because I’m not. As an enlightened human beings of the 22nd Century (Is that right? Are we in the 22nd Century now? How did that happen?), we don’t need to reinforce stereotypical issues that harm people or encourage discriminatory opinions, but what’s a pie in the face gonna harm?
I wish I could carry whipped cream pies in my briefcase for spur of the moment chuckles. I mean, maybe for health and safety purposes they could be stored frozen in the freezer like Cool Whip and removed to thaw just before I needed them. I could find many uses for this product.
Thank you for this lowball offer, whoosh, pie in the face. Thank you for never intending to close escrow, whoosh, pie in the face. Thank you for that Request for Repair on this AS IS sale, whoosh, pie in the face. Thank you for listing with your husband’s cousin, whoosh pie in the face. Thank you for picking my brain about all the fine nuances to sell and then sticking a FSBO sign in the yard, whoosh, pie in the face. Thank you for failing to deliver loan docs, whoosh pie in the face.
See, just thinking about this makes me laugh. But maybe that’s why I’m a Sacramento real estate agent who has survived and thrived all of these decades. If you gravitate toward goofy stuff, you’ll probably enjoy Anchorman 2.
Buying a Home in Sacramento in AS IS Condition
AS IS — two simple words that seem to cause so much confusion in Sacramento real estate. I can say AS IS over and over until the cows come home and it doesn’t seem to sink in. My sellers can ask me to draw a counter offer or an addendum to a purchase offer that clearly states there are: no repairs, no credits, no renegotiations, as the home is sold in its AS IS condition, and buyers can sign that document, yet soon as their pen leaves the page, their memory of this contractual agreement vanishes. Did they dip a feather quill into lemon juice? Have a lobotomy?
My heart goes out to buyer’s agents who have to deal with the AS IS Condition issue day-in and day-out. They can explain that a seller will not give them a credit nor make any repairs but the buyers will still push. I realize that sometimes it’s not the buyers who are the problem — it can be their relatives or their coworkers or their drinking buddies: Hey, when I bought my house, the seller painted the entire interior, bought me all new appliances and threw in a Mercedes. The implication being that the buyer is a wuss or a nitwit. The self-important braggers neglect to point out this was 20 years ago or in a different city but the point is it is not this transaction. All transactions are different.
When I receive an email from an agent with a single sentence attempting to defy the AS IS, I know what happened. The sentence might say, my buyer is requesting a $3,000 credit to closing costs. Or, my buyer would like to know if the seller will split the cost of a new roof, which might have been a talking point during negotiations. So, the agent feels a little silly having to ask that question because the agent had already discussed it with the listing agent and the buyer prior to the offer. I know the agent pointed out the roof and said it was the buyer’s responsibility. And I know the buyer understood. And we both know that I know.
Still, the buyer’s agent must ask the question if the buyer poses it.
If the buyer’s agent thinks the buyer has half a chance of obtaining any of these requests — which the buyer had made after the buyer promised not to make them — the buyer’s agent will try to build a case for the buyer. But when there is no case presented, just the request, I know the poor agent is feeling the pain.
Buyers often don’t stop to consider that they might be irritating the seller with these types of requests. Especially when they tripped over the sidewalk walking up to the front door. They should not come back later after promising not to ask for repairs and demand that the seller replace the sidewalk. It makes the buyer look like an idiot (or conniving), none of which sets well with the seller. Any special requests the buyer might need down the road, such as an extension to close or any gifts such as refrigerators or washers and dryers are unlikely to be granted when a buyer attempts to break a promise.
If a buyer doesn’t want to handle the consequences of purchasing a home in its AS IS condition, then maybe the buyer shouldn’t try to buy a home under those conditions in a hot Sacramento seller’s market. It’s all a part of home ownership anyway. Things break, malfunction and stuff need to be updated, repaired and maintained — all during the life of a home buyer. It’s scary for a buyer starting out, and that’s where the buyer’s agent can be an invaluable tool.
