What "As Is" Is - And Isn't
April 15, 2006 We sell houses in ?as-is? condition all the time, don?t we?
But what does ?as-is? mean?
Most of the time, it means that the seller doesn?t wish to make any repairs that might come up either through the home inspection or at walk-through. If the buyer agrees, then we have an ?as-is? contract.
However, many sellers think that it means they don?t have to disclose anything pertaining to the condition of the property. In Maryland, this couldn?t be further from the truth. Effective October 1, 2005, sellers are required to disclose any latent material defects. Now, these defects are ones of which the seller has actual knowledge and which a buyer would not reasonably be expected to discover, and which would pose a direct threat to the health or safety of the buyer.
We talked about this at length in our office, trying to come up with examples. The best we could do went as follows:
Say the seller has the fireplace cleaned and the chimney sweep tells the seller that they?d better not have any more fires until they have the flue repaired - that the house could catch fire because of cracks. The seller decides to forego fires and doesn?t have the flue repaired. This would be a latent defect and a material fact that should be disclosed to the buyer prior to entering into a contract.
Another example: The seller has the furnace inspected and finds out that there is a cracked heat exchanger - a definite carbon monoxide hazard. If it isn?t repaired, the seller must disclose this to the buyer prior to entering into a contract.
We even have a form called the Residential Disclosure/Disclaimer Statement. The sellers have the choice of filling out either the Disclosure or the Disclaimer, but whichever one the seller chooses, he must still disclose the existence of latent material defects.
If you?re unsure if you have a latent defect, I?d be happy to discuss it with you, but the easy test is this - would you want to know about this before you wrote an offer? If the answer is ?yes?, then you should probably disclose it. Even if being fair to the buyer doesn?t matter to you, you have a better chance of staying out of lawsuits if you disclose.
(C) 2006 Susan Pruden.
A lifetime Maryland resident, Susan Pruden has the ideal foundation for selling and buying homes. After 8 years working in just about every facet of the mortgage industry, and several years with her own company specializing in marketing for real estate agents, Susan got her real estate license in 1994. Susan has earned several industry awards. The CENTURY 21 Quality Service Pinnacle Award is based on reviews from Susan's clients and is earned by a very small percentage of agents. She has earned that coveted recognition since 2012
Two others were awarded by the Prince George's Association of REALTORS®. The Distinguished Sales Associate of the Year Award is based on a mixture of community involvement, association involvement and real estate education and designations. The other, the Distinguished Service Award, is for "exceptional meritorious service."
Susan is involved in her local community. She was named Cheverly Volunteer of the Year in 2018, even having June 25th designated "Susan Pruden Day" in the Town of Cheverly. She is also a Commissioner on the Prince George's County Historic Preservation Commission and President of the Cheverly American Legion Auxiliary.
Susan Pruden has lived in Cheverly lived with her husband, Joseph, for almost 30 years.
