(summary of information in RESOURCE September 2008 Volume 8, Number 10 - a Minnesota Association of REALTORS publication)
Any Realtor will tell you that many of the homes they show or list in the Twin Cities today are considered “as is”. So, what does this mean and what should you know as a buyer or seller?
Here are the “as-is” basics:
- The seller does not make any warranties about the central air-conditioning, heating, plumbing and wiring systems on the property to be in working order on the date of closing.
- When making disclosures, the seller’s liability is limited to facts known to the best of their knowledge at the time of dislcosure.
- The seller of a single family residential property (including bank owned foreclosed properties) is still required (by MN Statute 513.52-513.60) to inform a potential buyer (through a Seller’s Property Disclosure) prior to accepting a purchase agreement all material facts that a seller is aware of that may significantly or adversely affect an ordinary buyer’s use or enjoyment of the property or any intended use of the property of which the seller is aware. Typically this is used if the seller actually lived in the property being sold.
- There is also a form called the Seller’s Disclosure Alternative which allows a buyer to agree to waive the seller’s disclosure requirements listed above. This waiver must be signed by both the buyer and the seller. Typically, this is used if the seller did not live in the property, has not lived in it recently or if the home is a foreclosure.
- The seller / REALTOR is also required to provide a form called Buyer Purchasing “AS-IS” Addendum which gets signed buy the buyer and added to the purchase agreement.
- Seller can also provide an independent 3rd party home inspection report with any additions or corrections about the property.
- Your realtor relies on the seller’s to know material facts regarding the property and must disclose anything they know or find out through the seller. A realtor may not waive their duty to disclose.
NOTE: A waiver of the disclosure requirements for MN Statute listed above does not waive disclosures required by other law. Other government disclosures that are required by law at time of sale include: septic system, wells, valuation exclusion, lead-based paint and local government disclosures. A seller CAN NOT waive these disclosures regardless if the buyer signs a waiver or if the property if being sold “as-is”. The MNAR forms listed in italics above will still include these disclosures for the buyer to fill out.
As I have stated before, if you are buying an “as-is” home in the Twin Cities or anywhere else, it is highly recommended that you obtain your own independent home inspection - even if the home is new construction. See my article http://www.twincitiesrealestategal.com/home-buying/twin-cities-home-inspections
Questions? Please contact me!
Jen McKinnon
Realtor / Investor
AGENT REFERRAL NETWORK
Member of MN Real Estate Team - #1 team in MN 2006,2007,2008
612.384.1073
jen[at]mnrealestateteam[dot]com