When the NC Association of REALTORS made updates to the Standard Offer To Purchase And Contract in 2011, language was added making the home sale as-is. The contract now reads: THE HOME IS BEING SOLD IN ITS PRESENT CONDITION. BUYER AND SELLER ACKNOWLEDGE AND UNDERSTAND THAT THEY MAY, BUT ARE NOT REQUIRED TO, ENGAGE IN NEGOTIATIONS FOR REPAIRS/IMPROVEMENTS TO THE PROPERTY.
The intent seems to have been to make repair negotiations easier, since NO REPAIRS are contractually required of the seller. Roof needs to be replaced? The seller isn’t required to repair. Old knob and tube wiring still in use? Seller isn’t contractually obligated to update it. Structural repair needed? Same answer, seller doesn’t have to make the repair to honor their contract.
Although most states have adopted similar language, there is often a learning curve for clients buying their first home in NC. As agents, we must make sure that we communicate AS-IS and NON-REFUNDABLE clearly and effectively. YES, many times this means consulting with a buyer’s parents who don’t live in NC, or haven’t bought a home in the last 10 years!
When this provision seems so obviously in the seller’s favor, how do buyers and sellers navigate repairs and ultimately get to closing?
Tips for buyers:
1- Remember that no home is perfect. Buyers should base their offer on the visible condition of the home. If the listing price doesn’t reflect the current condition, ask for repairs or a repair credit in the initial contract negotiations.
2- Work with your LOCAL lender to get pre-approved prior to making an offer. Paying cash? Proof of Funds letter should be submitted with the offer. Need a lender referral? Call your agent!
3- Be reasonable and prioritize a repair request, in order to be more likely to have success negotiating repairs or a monetary concession in lieu of repairs. Sending an inspection report to a seller and asking them to “fix everything” is likely to get you nowhere.
Tips for sellers:
1- If this sale falls through, are we required to disclose this deficiency on the NC Residential Property Disclosure statement? If so, fix it now!
2- If you want top dollar, make necessary repairs in advance. Consider having the home pre-inspected by a home inspector or structural engineer if necessary.
3-Non-refundable Due Diligence fees are higher than ever right now, however the first offer is usually the best offer, and putting the house “back on the market” aren’t words that any seller wants to use.
4- Sellers want to sell their house, not collect due diligence fees. Get to the closing table!
5- There is not a financing contingency so buyers must be pre-approved if they are going to obtain a loan for the purchase. Sellers should always ask buyers for a pre-approval letter or proof of funds. Since Due Diligence money is non-refundable, sellers should have confidence that buyers in this market, where large Due Diligence fees are the norm, are qualified to complete the purchase. How do you get to the closing table on an “as-is” sale? Be reasonable, overcommunicate, and remember that a little goodwill goes a long way!
Cheers to pars, birdies and football. It is an incredible time to live in NC!
Tori