The real estate purchase contract (REPC) requires the seller to warrant certain items of the home to the buyer. This is called the section 10.2 warranty because of its enumeration in the REPC. Some of the warranted items include that upon the day of possession, the heating, cooling, electrical and plumbing and sprinkler system and fixtures, and the appliances and fireplaces will be in working order and fit for their intended purposes. Also, that the roof and foundation shall be free of leaks known to the seller. There are more items warranted by the seller in the REPC.
For various reasons, the seller may not want to warrant all these items. If not, the seller must specifically omit section 10.2 from the purchase contract, and thus, the home is being sold 'as-is.' This limits the liability of the seller, but also raises important questions to the buyer. Why would a seller not want to warrant the property? In some cases, the roof leaks and the appliances don't work and the seller does not want to fix the home. In other case, the home may be perfectly fine, but the seller may not know the condition of the property.
Take a bank owned foreclosure for example. The bank usually does not know the true condition of the property (unless it is a HUD foreclose. HUD inspects every property prior to re-sale) The last thing they want to do is to find out they have to replace the roof.
The section 10.2 warranty should not be confused with a third-party home warranty. A home warranty is purchased from a third party company, and covers certain items in the home for one year after the day of possession. The section 10.2 warranty warrants the home to be in a certain condition on the day of possession.
As-is properties often offer substantial savings, and should be considered for purchase just as warranted properties. More effort is needed to find out why the property is being sold 'as-is.' Regardless if the property is being sold warranted or 'as-is,' the home purchase should include a home inspection from a professional inspector. This is the best way to determine the true condition of the property.
I'm ready to answer any question you might have about any of these listings. Call or email now!
Gary Pryor "Your Home is my Priority!"
Altius Realty
Email: priority@ListingUtah.com 801-221-9860
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Single Family in Utah County
Alpine, Utah 84004
