Today, I had the displeasure of communicating with a broker who has the idea that acquiring a property “as-is” means that a buyer should acquire the property without questioning what the “as-is” entails. As ridiculous as this may sound, this is exactly what this particular broker expects a buyer to do. To agree to purchase a property as-is, where-is….and blind.
Ok, so now I am going to speak to the real estate investment buyers out there; my peers who make their livelihoods investing in this great product called REAL ESTATE. The success of our business depends fully on the good decisions we make concerning the properties we choose to acquire for our businesses regardless of niche. This a critical element to our success, and it requires that we NEVER buy ANYTHING blind; least of all, real estate.
If you want to agree to an “as-is” and “where-is” purchase, then it is your business; but, at least KNOW what the “as-is” condition of the property entails before agreeing to close on it. Otherwise, you are asking for unwelcome–and often expensive–surprises in the future. These unknown elements will raise your level of risk in the deal; make no mistake.
A smart real estate investor knows how to apply the principles of risk to their investment decisions; and then adjust the expected return accordingly. Without an inspection period, the opportunity to ascertain the level of risk in the deal is not there.
A little due diligence goes a long way, and it should be done upfront with EVERY deal in order to uncover exactly what “AS-IS /WHERE-IS” means. Don’t ever buy blind.
When a broker tells me that “no inspection period is allowed,” I perceive that agent as playing a con game. Don’t get conned.
Insist on an inspection period with sufficient time to conduct due diligence.
I believe it is wrong and shows poor form to not allow an inspection period. To me, it means that there is something hidden that the other side does not want me to discover. This is a major RED FLAG.
If I am going to accept a property “as-is” and “where-is,” then I am going to insist on an inspection period to uncover what it is exactly that I am taking over.
If you are a serious investor, you would be wise to do the same.