My clients are encountering a lot more “AS-IS” sales lately. There is a lot of confusion over what AS-IS really means.
Important: This post speaks to AS-IS in Wisconsin. AS-IS real estate transactions are different in every state.
AS-IS sales are generally sales where the seller will not make property condition disclosures, provide a Wisconsin Real Estate Condition Report, and will not cure defects. Remember that “generally” is not “always!” Some sellers will provide a condition report and may elect to repair defects.
AS-IS does not prevent buyers from including testing and inspection contingencies. Sellers who attempt to prevent inspections, testing, and buyer investigation are at risk of being sued for misrepresentation. (Please see below.)
Sellers selling AS-IS must exercise ordinary care by avoiding acts that could cause foreseeable harm or create unreasonable risk. For example, sellers who know of a deep hole on the property, unsafe rotten floors inside of an old house, etc., must disclose these issues to potential buyers.
Buyers generally cannot seek compensation from the seller after closing for defects found after the sale. For example, a buyer who discovers bad wiring after purchasing an AS-IS house generally cannot seek redress against the seller. However, sellers may be liable for misrepresentation if they actively conceal a defect or if they prevent a buyer from investigating the property. Under Wisconsin law, sellers may also be held liable for making false statements about the property.
The bottom line?
Wisconsin sellers must understand that an AS-IS clause is never be a complete escape clause. Sellers considering AS-IS sales may want to confer with legal counsel.
Wisconsin buyers must approach AS-IS sales with caution. Buyers must learn as much about the condition of the property as possible, including conducting all appropriate inspections and tests. Wisconsin AS-IS buyers must expect that they will never be able to seek redress from sellers after closing.
My name is Mike, I am a Broker Associate with Coldwell Banker Residential Brokerage, and I’ve negotiated both sides of AS-IS sales. It will also be my pleasure to introduce you to an excellent attorney who specializes in real estate transactions! Please call or email me today; it will be my pleasure to help.