Sometimes when a property is listed for sale, it is advertised “As-Is,” but there may be some confusion as to what this term actually means. Some may believe that “As-Is” acts like a magic wand that absolves the seller of all responsibility in a real estate transaction. The reality is more nuanced than that. Here, we will cover some of the basics of what an “as-is” clause actually means and how it may enter a real estate contract.  

First, an “as-is” clause or provision is a term that may be included in a contract. Generally, it means that the seller is selling the property in its current condition, that the seller will make no repairs, and that the seller is providing no express or implied warranties as to the condition of the property. An “as-is” clause does not mean that the listing firm can ignore its legal responsibility to disclose material adverse facts pertaining to the physical condition of the property, or that the seller is exempt from the Virginia Residential Property Disclosure Act. Even with an “as-is” clause, the seller still must deliver the property at settlement in the condition it was in when ratified.  

In Virginia, many of the standard form residential purchase contracts contain terms that require the seller to warrant the appliances and systems. An “as-is” clause would negate any such warranties. Additionally, while a purchaser could still have a home inspection contingency in an “as-is” contract, the purchaser would not be able to negotiate repairs. If the purchaser is unsatisfied with the results of the inspection, the purchaser would either need to exercise the contingency and terminate the contract or take the property in its current condition.  

Second, an “as-is” clause must be included as an express term in a real estate contract to be binding. Advertising a property in the MLS “As-Is,” but failing to put that term in the contract does not create an “as-is” contract. Remember, a property listing is a solicitation for offers, not an offer in and of itself. If you want terms contained in the listing to be part of the contract, you need to put those terms in the contract.  

If you are looking for an “as-is” clause to include in a purchase contract, Virginia REALTORS^®, as part of its Standard Clause Booklet, provides an “as-is” provision to include with the Virginia REALTORS^® Residential Contract of Purchase. Additionally, you can always contact us on the Virginia REALTORS^® Legal Hotline with questions.