Inspection on an As-Is Duplex

10 Replies

I am looking at a duplex near a university that is rented to a bunch of college kids till July of next year. The house is old (50-70 years old) and the owner is selling it as-is. In such situations do we still do an inspection before putting offer? I am mainly concerned of bigger expenses like roof, furnace, water heater or structural issues etc. 

Not sure if it helps to spend the money upfront in inspection or to account for worse case scenario and put the offer. As the owner is not going to make any repairs based on inspection report, wasn't sure if the inspection still needs to happen prior to the offer.

Thanks in advance. 

Parag

You can definitely do it during the due diligence phase; put the offer in and get it accepted.  Then do the inspection and once you fully understand the repairs you have on your hands, you can use your inspection report to ask for price reduction if you believe it is warranted.  Just because they say they are selling it as-is, doesn't mean they won't give a price reduction later.

@Parag D.

Youd want to get the the offer submitted and in contract before hiring an inspection.

Imagine paying $450 (or more) for an inspection, and in the time it takes to get the inspector out there and get the report back to you, the property goes into contract with a different buyer. Now you have a report to a house someone else is buying, wasting your own time and money.

Makes sense, @Isaac- thanks! 

Originally posted by @Isaac Pepper :

@Parag D.

Youd want to get the the offer submitted and in contract before hiring an inspection.

Imagine paying $450 (or more) for an inspection, and in the time it takes to get the inspector out there and get the report back to you, the property goes into contract with a different buyer. Now you have a report to a house someone else is buying, wasting your own time and money.

@Parag D. It is normal procedure to get an offer accepted and then start the inspection phase. Definitely have some sort of contingency in there so you can back out of the deal if the numbers don't align after you do your due diligence. Remember, your financial projects can look fantastic, but if unknown issues arise during the inspection phase which make the properties numbers not work anymore, it is completely fine to walk away. I have done this multiple times. I'd rather lose an inspection fee of $600 bucks than move forward with a property that is going to be a money pit.

Since the inspector's job is to locate any problems or potential problems on a property, then I would say it is a must to hire an inspector; it might cost you a little bit in the beginning, but hiring an inspector will save you a fortune in the future.

First things first, you need to have an accepted offer and then do a professional inspection. The 'AS IS' contract basically means that the owner is not obligated to make any repairs, but you would still want to know how much repairs are needed in the short term vs. long term and if there are any hidden issues that are not visible to a laymen.  By the way, I have rarely seen a 50 year old property that doesn't need many repairs, unless it recently went through a major rehab.  The 'AS IS' contract in most states allows a buyer to back out of the contract so you should check the standard 'AS IS' contract in your state.  Good luck!