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What Does Buying A House ‘As-Is’ Mean, And Should You Do It?

Carla Ayers5-Minute Read
PUBLISHED: May 26, 2023

If you’re on the hunt for a new home, you may come across homes listed “as-is.” While the prospect of buying a home sold “as-is” may sound tempting due to its lower price, there are a handful of factors that can help determine whether an “as-is” home is right for you.

Let’s discuss the pros and cons of buying a home “as-is” and what it may mean for your home buying experience.

What Does ‘As Is’ Mean When Buying A House?

A home sold “as-is” means you purchase a home in its current condition. Sellers don’t make any repairs, renovations or cosmetic touch-ups before listing.

Homes sold “as-is” don’t guarantee you a place that’s in perfect condition. In fact, “as-is” homes tend to reflect the potential TLC they might need in their price – which is typically less expensive than standard listings. For example, homes sold through foreclosure can be move-in ready, but there’s always a chance they haven’t been well maintained.

That’s not to say that buying an “as-is” home is the equivalent of purchasing a fixer-upper. Some sellers sell their home “as-is” to speed up the home sale process – in which case, the house could present no major issues at all.

“As-is” may not even apply to the entire house, either. Some sellers list particular features “as-is” to avoid contracting out a project or dealing with a minor repair before listing their home. Just be sure to clarify with the seller which parts or components of the home are “as-is” before entering negotiations.

Also keep in mind that “as-is” homes must meet federal and state minimum disclosure and inspection standards, which will ensure your health and safety regardless of any rehab projects that may come with the property.

Establishing a relationship with a lender early on by getting preapproved can help ensure you’re on the right track toward a home you can afford that’s compatible with your loan's requirements.

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What To Consider When Buying A Home ‘As-Is’

Like any big decision, you’ll want to carefully consider whether buying an “as-is” home works best for you and your circumstances. Here are some “as-is” best practices to help guide you in making your decision:

Get A Home Inspection

To understand the kind of financial commitment an “as-is” home may present, it’s important to have a proper home inspection done. Your inspector will be able to point out any major issues with the house and possibly estimate the costs for repairs and renovations. If the home is at risk of damage from wood-destroying insects (WDIs), such as termites, add another layer of protection with a pest inspection.

Unlike an appraisal, which determines a home’s value and is a requirement for the mortgage loan, home inspections are for the home buyer’s benefit. An inspection will help you better understand what work is yet to be accomplished.

Home inspections are also noteworthy because they can give you more leverage during house price negotiations. If the current homeowner or seller refuses a home inspection, this may be a clue that there is a larger issue that needs to be uncovered before you continue to pursue the home.

For home buyers further along in the process, consider including an inspection contingency in the purchase contract. The contingency allows buyers to back out if the inspection uncovers major problems.

Ask For A Home Warranty

A home warranty contract is also worth looking into, especially when the prospective home doesn’t require a head-to-toe makeover. If the “as-is” home you’re interested in only lists certain components of the home “as-is” – particularly appliances – a home warranty policy can protect you.

Home warranties are service contracts that cover your home’s appliances and other systems for 1-year or 2-year terms. Home warranty policies cover necessary repairs or even replacements for major home appliances or systems whenever they age out or stop working properly.

Although most policies won’t cover repairs that are already an issue, if you’re feeling unsure about the age or condition of a major appliance, a home warranty can cover you if anything goes wrong in the future.

Make Sure It Meets Minimum Property Requirements For Financing

If you’re a real estate investor, “as-is” homes can seem incredibly enticing because of their low cost and the opportunity to hone your house-flipping skills. In this case, purchasing an unlivable “as-is” home probably won’t scare you away because your vision for the property’s future feels bright.

However, most mortgage lenders won’t feel the same way if your home fails to meet a certain level of livability. This livability standard is known as the minimum property requirement (MPR), and most government-backed loans will require an official appraisal that confirms the requirements are met.

Although minimum property requirements vary depending on your lender and loan type, we can have a look at the MPRs for the most common loan types:

FHA Loans

Most homes that need a total renovation won’t meet the minimum property requirement standards for Federal Housing Administration (FHA) loans. To qualify for an FHA loan, the “as-is” house must be structurally sound and devoid of any unsafe conditions at the time of purchase.

VA Loans

VA loans, which are backed by the Department of Veterans Affairs and offered as a benefit to active-duty military workers, veterans and surviving spouses, have stricter MPRs than other loan options. General MPRs for VA loans include safe drinking water, capable mechanical systems and a roof in good structural condition.

USDA Loans

U.S. Department of Agriculture (USDA) loans are used to buy homes in USDA-designated rural or suburban areas. Common MPRs for USDA-eligible homes include a sound foundation, an up-to-date electrical system and well-functioning HVAC and plumbing.

Calculate The Repair Costs

In addition to the typical down payment and closing costs when you buy a house, another important factor to consider are repairs. An open discussion with the home seller can reveal the additional costs you could be looking at or prompt you to hire a home inspector to get a more accurate estimate.

Ideally, buying a home “as-is” leaves you with more money for remodeling or renovations because you save on the lower home sale price. Depending on the home improvement projects you want to tackle, you should also factor in the cost of hiring a repairperson or contractor.

Repair costs come with other strings, so you should know what you’re getting into before committing to an “as-is” home.

Work With A Real Estate Agent

For most big real estate decisions, consulting with a trusted and experienced real estate agent or REALTOR® can be a huge help. If you’re on the fence about whether an “as-is” home is right for you, a real estate professional can offer guidance that caters to your budget and circumstances.

These experts have vast knowledge about your local housing market and can certainly help you make an offer on a house, negotiate with a seller and help you determine whether investing in an “as-is” home would be worthwhile for you and your family.

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Tips For Buying A Home ‘As-Is’

Before you sign on the dotted line, here are some helpful tips for anyone thinking of buying a home “as-is”:

  • Hire a real estate attorney: A real estate attorney can help protect your rights as a home buyer, help you gain a better understanding of a home’s condition, review the Seller’s Disclosure and provide guidance during the transaction process.
  • Get a title search: Your real estate attorney can conduct a title search to ensure there are no issues with the property’s title and confirm the transaction can proceed without issue.
  • Review the deed: You or your attorney should look for any easements or liens on the property deed that may trigger red flags.
  • Ask questions: It’s important to find a home, but it’s just as important to feel confident about your purchase. Just because a home is listed “as-is” doesn’t mean you can’t ask the home seller questions about the property.
  • Consider home warranty options: A home warranty offers protection and covers any problems that may come up with major appliances, home systems or “as-is” home features, saving you money in the future.

Pros And Cons Of Buying A Home Sold ‘As-Is’

Let’s review some advantages and disadvantages before you buy a house “as-is.”


  • “As-is” listings generally have lower prices.
  • The closing process is typically faster for a house sold “as-is.”
  • “As-is” homes are great fixer-upper projects for real estate investors to flip and make a profit.
  • You’re less likely to get into a bidding war with other prospective home buyers.


  • “As-is” homes can have hidden costs, including major repairs or defects.
  • “As-is” homes in poor condition may disqualify you from certain loans.
  • Some states don’t require a Seller’s Disclosure. In those states, buyers bear the responsibility of identifying issues with any property – “as is” or otherwise.
  • Because there’s less competition, home sellers may not be as open to negotiating.

The Bottom Line: Should You Buy A House ‘As-Is’?

For some, buying an “as-is” home can be a great way to save some money or tackle an exciting housing project. But others may find themselves spending significantly more time and money than they bargained for in repairs.

Be sure you know as much as you can about an “as-is” property before buying. Consider how it can affect your loan options and the time and money repairs could cost you.

Interested in buying a home “as-is”? Get approved for a home loan online with Rocket Mortgage®.

Get approved to see what you can afford.

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Carla Ayers

Carla is Section Editor for Rocket Homes and is a Realtor® with a background in commercial and residential property management, leasing and arts management. She has a Bachelors in Arts Marketing and Masters in Integrated Marketing & Communications from Eastern Michigan University.