What to think about when buying a property “as is”

This article looks at some of the risks that come with buying an “as is” or teardown property.

As the oldest state in the country, it should come as no surprise that a lot of Massachusetts' housing stock is a little aged. In fact, as Realtor Magazine points out, Massachusetts has some of the oldest housing stock in the country, with the median age of houses here being 53 years (third behind the District of Columbia, at 75 years, and New York, at 57 years). That aged housing stock means that a lot of the properties for sale in Massachusetts may be in poor shape, with some being sold "as is" or even as teardowns. While buying a teardown property has advantages, it is important for homebuyers to be aware of some of the risks that go along with purchasing a dilapidated property.

Only known defects will be disclosed

As Realtor.com points out, those selling an "as is" home are required to disclose known defects with the home. However, that means that unknown defects will likely go undisclosed. For homebuyers, the risk of undisclosed defects means that a home inspection is still an important step, even if the home is ultimately going to be torn down. That's because the defects in the home - such as asbestos and lead paint - may be hazardous and require extra expense to remove.

Getting a mortgage isn't easy

Lenders are often not too keen about providing mortgages for homes that are only going to be torn down. In fact, most lenders will only provide mortgages that are equivalent to what the property is actually worth. Obviously, that presents a challenge for those who intend to buy a house only to tear it down and build anew. Homebuyers should shop around for lenders that specialize in mortgages for teardowns and fixer-uppers. Additionally, if the house isn't being torn down but merely requires some repairs then it may be possible to ask for the seller to do some of those repairs him or herself.

Legal issues with rebuilding

There are a lot of legal issues to take into consideration before tearing down and rebuilding a property. The property may be protected by heritage preservation laws, for example, that make it extremely difficult to tear down. Furthermore, zoning regulations may limit what can be built on the property, including how close any new buildings can be to the neighbors' property and how tall the new structure can be. It is essential to learn about any such restrictions well before purchasing a property.

Real estate law help

Buying or selling a home is a major transaction, which is why anybody who is buying or selling property should contact a real estate attorney for assistance. An experienced attorney can ensure that the process is handled smoothly and that potential problems are avoided before they arise. With an attorney on hand, buyers and sellers will have extra confidence knowing they are making the right decisions moving forward on their transaction.