Real Estate · General

A buyer includes an 'as-is' clause in the purchase offer. Does this mean the buyer has no rights regarding property condition?

Correct answer

No — 'as-is' means the seller won't make repairs, but the buyer retains the right to inspect and can still cancel if inspection reveals unacceptable conditions per the inspection contingency; the seller must still disclose known material defects

  1. A Yes — as-is means complete acceptance of all conditions with no recourse
  2. B No — 'as-is' means the seller won't make repairs, but the buyer retains the right to inspect and can still cancel if inspection reveals unacceptable conditions per the inspection contingency; the seller must still disclose known material defects
  3. C As-is clauses are not valid in real estate contracts
  4. D As-is only applies to personal property

Why this is the answer

AS-IS CLAUSES in real estate mean the seller will not make repairs — they are selling in current condition. What AS-IS does NOT do: waive the buyer's right to inspect (unless specifically stated and voluntarily waived by the buyer); waive the seller's disclosure obligations (seller must still disclose known material defects); prevent the buyer from cancelling per their inspection contingency. What AS-IS means practically: the buyer agrees to accept the property's condition as it exists; if the inspection reveals problems, the buyer can cancel (per the inspection contingency) but cannot require repairs; some as-is contracts also waive the inspection contingency — this is a higher risk for the buyer. Distressed sales (foreclosures, estate sales, REO properties) frequently include as-is clauses because the seller has no knowledge of the property's full condition.
Source: Real Estate State Exam, As-Is Clause

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