There’s more than one way to lose a buyer, and today’s post centers on a common one — that pesky “as is” clause.
Contracts for the sale of condos and co-ops in Manhattan and elsewhere in New York City generally include the clause, which stipulates that the buyer accepts the apartment “as is.” If the clause is not included, contingency language allows the buyer to cancel the contract in the event that the seller doesn’t agree to remediation.
Including an “as is” clause, especially for units in new buildings, shifts risk from the owner to the buyer. And the risks — e.g. shortcomings in workmanship or code issues — are manifold in new developments. So be it: caveat emptor.
Certainly, home inspectors like to prove that they are worth the money their clients spend on them, so you can be sure they’ll find defects.
Whether for transactions involving resales, for which home inspections occur here only rarely, prospective buyers are bound to notice concerns before or, worse, after they sign on the bottom line.
- “The washing machine makes a lot of noise and seems to be on its last legs. We would appreciate a credit to replace the thing.”
- “Shelving on that built-in wall unit is warped, and we’d like to have it replaced.”
- “The kitchen drawers are sticky, and we’ll need to lower the accepted offer to permit us to purchase new ones.”
You get the picture, and sellers see buyers’ requests through a broken lens. To sellers in such a situation, “as is” means that the buyers have been warned: There is to be no recourse before or after the contract is signed.
Such sellers tend to believe their buyers are unrealistic at best, greedy at worst and reflective of bad faith somewhere in the middle.
Sellers are likely to refuse buyer requests as contrary to the terms of an “as is” offer and subsequent contract.
But they do so at their own peril: The price of their failure to relent can be the collapse of a good deal and an extended time on the market, which could turn against them. Even retention of a deposit can prove to be insufficient recompense.
Sellers who lose sight of their priorities in a fit of prideful behavior have only themselves to blame for the consequences.
Sometimes it is less important to stand on a principle that is based on two little words than to leap toward a conclusion that benefits sellers in the long run.
Tomorrow: Weekly Roundup
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Licensed Associate Real Estate Broker
Senior Vice President
Charles Rutenberg Realty
127 E. 56th Street
New York, NY 10022