(c) 2008 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.Question: I am selling my house "as is" in a short sale, and have an offer that the bank approved. The buyers' inspection came up with $1,000 in wood rot that I paid to fix. An inspection turned up mold, which will cost $1,300 to clean up, and the outdoor air-conditioning unit got struck by lightning, which is going to cost $900 more to fix. I have already paid $1,000 more than I have. Must I pay for this? My real estate agent says so, without even seeing if the bank or buyer would chip in. Is this the sign of an agent who doesn't have my best interests in mind?
-- Ashley McElligott, Orlando, Fla.
Answer: "As is" seems like a clear concept -- what you see is what you get.
But like almost everything else in real estate, it's not that simple. Laws covering real-estate regulations vary by state. For a run-down, check Arello.com, the Web site for the Association for Real Estate License Law Officials. Also, read your contract carefully to see what your responsibilities are.
Typically, sellers who put a house on the market "as is" are merely saying they won't guarantee that all a home's components are in working order. That doesn't stop buyers from including a home inspection clause in their offers, and these days, most do. Since nearly every house, including new ones, have flaws, both parties usually hash out which repairs will be made, and who will pay for them, after the home has been inspected. If they can't reach an agreement, the deal falls through.
You're in a tough situation. Finding a buyer who is willing to do a short sale isn't easy in a weak housing market -- and if you're unsuccessful, you'll face foreclosure and a tainted credit record. Getting the bank to agree to accept less than it's owed is difficult and time-consuming.
The buyers have the upper hand in this situation, and they know it. Undoubtedly, they have other options, and may pursue them if you balk at making repairs needed to make the house habitable (and I would argue that cleaning up mold and fixing a fried air conditioner fall under that category).
As to whether your agent is acting in your best interests, I posed that question to Walt Molony, spokesman for the National Association of Realtors. He said the agent is probably urging you to acquiesce to the buyers' demands to salvage the deal, which is acting in your best interests. Under normal circumstances, a sum of money might be set aside from the proceeds of the sale to pay for additional repairs. Since this is a short sale, however, the agent needs to make the buyer aware that you're having a hard time coming up with money for fixes.
Forget about asking the lender to come up with the money, since they're already agreeing to accept less than they're owed. "That would not be well-received in this current environment," Mr. Molony says.