What Does It Mean To Buy a House “As Is”?

for sale sign

What Does It Mean To Buy a House “As Is”?

A few weeks ago, I touched on the subject of buying a home “as is” in the blog post titled: Risks Associated With Buying Power of Sale Properties. Since then, I’ve received a few follow up questions from buyers looking for more information. Today, let’s dig deeper into the subject and answer a few of these questions.

“As is” – a legal clause to watch for.

An “as is” clause is sometimes included in an agreement of purchase and sale of a property. In order to make an offer on a home, the buyer must sign this type of agreement, which means they are also agreeing to the clause.

An “as is” clause would go something like this: The Buyer also acknowledges that the Seller makes no representation and/or warranties with respect to the state of repair of the premises, inclusions of chattels or fixtures, or ownership of fixtures or appliances, and the Buyer agrees to accept the property “as is”. Chattels and fixtures on the premises may or may not be included with the premises but the Seller shall not be obliged to remove any chattels or fixtures. (OREA Clauses)


What exactly does that mean? Simply that the seller won’t spend any time or money to fix issues. Broken furnace? The seller isn’t going to fix it. Inspector finds old knob-and-tube wiring? They won’t replace it. The seller is telling you in advance that they won’t guarantee that the home is in good condition, and that they aren’t going to do anything about it.

What should I do as a buyer when I see this clause?

There’s no need to run away from an “as is” sale. However, you should take a few steps to protect yourself and your money.

First, work with a registered real estate professional. This ensures they have the proper training and qualifications to correctly handle your home purchase. In Ontario, you can check if your real estate agent is registered through the Real Estate Council of Ontario website.

Second, hire a qualified, professional home inspector. If there are any deficiencies with the home, you want to find them before you buy. Choose a home inspector that belongs to a recognized professional organization, such as the Canadian Association of Home and Property Inspectors (CAHPI) or the Ontario Association of Home Inspectors (OAHI).

Finally, always consult a lawyer that specializes in real estate. They can guide you through the offer and provide legal advice.

Can I still negotiate with the seller?

Yes you can! Some buyers think an “as is” clause means they have no room to negotiate. Luckily, that isn’t true. If your home inspector finds defects, you can adjust your offer price. The seller may or may not accept it, just like in a regular home purchase.

What’s in it for me?                                                              

The biggest benefit for the buyer of an “as is” property is the potential savings. Since these sellers tend to need a quick sale, these homes often have a list price below other similar properties. But buyer beware – there’s no guarantee it’s a good deal. Before buying, look at comparable properties on the market. Also get the opinion of a real estate agent to see if the price is right.

Why would a seller choose to sell “as is”?

What the seller may lose in profit, they gain in speed, peace of mind and simplicity. Sellers who list a home “as is” do so for a few specific reasons. Sometimes, the house is being sold by a bank as a result of a power of sale. Other times, it’s being sold by the estate of former owners. In most situations, sellers have little information on the property and its systems. Listing the property “as is” lets them off the hook. It gives buyers all of the risks and responsibilities.

Home buyers, would you consider an “as is” property?