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Hi I'm Keith Gordon I'm the real estate broker for
the website GetMoreOffers.com and the company ADDvantage® Real Estate Services
the topic is contracts and the difference between an "As-Is Contract" and a
let's just call it a "Non-As-Is Contract" other people call it a "FAR BAR" or
"Residential Purchase and Sale Agreements" something like that but there is a is a huge
difference in the two contracts
on and there is a lot different topics relating to them but let's
talk about a couple topics first of all some sellers go, "I want to sell my home
'As-Is'." In that they want to put that language in the MLS in the listing
that's fine you can do so I don't recommend it because
I think you should look at it like you should be happy to get
any offer that's good you might get a wonderful offer on a "Non-As-Is Contract"
a regular contract and
it could be a lot higher than the offer you got on "As-Is Contract", sure you take
the higher one so
I don't think it's in your best interest to state in the MLS
I'm selling my home "As-Is" because you wanna sell your home for as much money as you can
as you can; not "As-Is" no bear, the difference between "As-Is" and a regular contract is pretty much
contract is pretty much this, is say
"As-Is" an "As-Is Contract" means that
they have a right to inspect, the buyer, usually 10 days
the default is 15 on the contractor I usually put 10. That
means within 10 days they can get out the contract for any reason whatsoever
at their sole discretion
paint color, I don't like the way the weather looked that day, it doesn't matter.
they can get out. So that's what an
"As-Is Contract" is. It's a is just, "Let me Inspect your property
and if I like the inspection after that 10 days
then that contingency is removed. Of course there could be a financing
contingency there for
a mortgage and if there's a financing contingency that's another contingency that's
gonna have to
sit there til it's either closed or
or whatever but financing contingencies really don't go away too easily in a
contract
if you look at it carefully if they don't get
the mortgage approval on the last day they can get out the contract and get their money
back
so we're not really talking about holding money here you're not going to
keep anybody's deposits, the only way you can keep a deposit
with an "As-Is Contract" is if it's cash
they've passed the inspection period and they don't close then you get to keep
their deposit
on or you might have to share it with the Broker with our company we don't have
that in our listing agreement with you
you share retained deposits with the Broker but with a full service listing
you will see that language they get 50% of
retained deposits typically but not to exceed their commission
we don't do that so that's an "As-Is" it's a pretty straightforward thing
now with a traditional contract or a standard contract there is something
called a repair limit. Repair limits
are usually a dollar amount or percentage typically it's 1.5 percent of
the sales price
that's outlined up front to be discussed
if there's issues with the inspection report a lot of sellers don't like that
1.5 percent and they cross it out make it 500 dollars which is fine as well
the buyer's agent might not like that maybe they're okay with it
depends on how clean the house is. If the houses isn't that clean and they suspect
there might be some issues they're gonna not want to back off that 1.5 percent
repair limit clause and what this clause means is that if the contract is
a hundred thousand dollars 1.5 percent is fifteen hundred dollars
so for fifteen hundred dollars buyer and seller get to talk about
that money and keeping the deal together
so as long as the inspection report reveals fifteen hundred dollars OR less
problems with the report and no issues that they won't fix than
the contract remains intact and actually
the seller can hold the buyer to the deal as long as
he or she's going to fix those those issues so
it's really to the advantage in a way for the seller even though most sellers don't
believe that but it is because
what if this buyer wants to get out of a deal
but they have repair limits of 1.5 percent well
if the cost of the repair is a thousand dollars the seller can keep him in
the deal because that's part of the contract
I don't like repair limits when I present an offer as a buyer's agent
I use an "As-Is Contract" all the time for that very reason if I wanna leave a deal
because I don't like the inspection report
because I've got a very tough inspector myself so if
if my guy from Frontline Inspections says he doesn't like
you know he's got "This and This" and I go "I don't like that either" and my buyer
doesn't like it, sorry we want out of the deal and we leave but can't do that so easily with
and "As-Is" I mean with a normal contract so as a buyer's agent
I like an "As-Is" as the seller I'll take either one
doesn't matter to me so that's primarily the difference
and there is also something called an "As-Is, Where-Is"
that's usually what banks use at times "As-Is, Where-Is"
you know there it is no inspection you bought the home.
Online auctions are as are usually, some of them are "As-Is, Where-Is" but sometimes
they give you the right to inspect as well
well that's the primary difference I hope that helped you. If you have any
questions about contracts you're welcome to call me.
I'm available 8am-8pm seven days a week at our company and if I'm not I
will call you back
again I'm Keith Gordon broker for ADDvantage® real estate services.