As Is Sales Contract: Everything You Need to Know
An as is sales contract is preferable to sellers because the buyer agrees to buy an item in its current condition.3 min read
An as is sales contract is preferable to sellers because the buyer agrees to buy an item in its current condition and cannot hold the seller responsible for any defects found with the item after the completion of the sale.
Basics for Creating a Bill of Sale
A bill of sale is a record of a transaction between a buyer and a seller. A sales receipt for a piece of property can function as a bill of sale as it provides evidence that a private transaction has taken place.
When writing a bill of sale, you should include the following information:
- When the purchase took place.
- The location of the property.
- Contact information for all parties involved in the sale.
- A description of the item sold, including information about its condition.
- The price at which the item sold and the method of payment.
- Any loans or liens involved in the transaction.
A bill of sale can be used for transactions selling a variety of items, like:
Sellers benefit from bills of sale because they demonstrate that the sale actually took place and that the buyer received the item. Bills of sale can also protect the seller from liability if it indicates the item was sold as is. By the same token, bills of sale are advantageous to buyers because they show that the buyer paid for the item and that they now own the item. A bill of sale may also allow the buyer to insure the item.
You should be sure to use a bill of sale when full-payment is made at the time of exchange or if you are selling someone your personal property as is. If there is a defect with the piece of property, the bill of sale will prove the buyer purchased the item as is, and the buyer will not be able to hold you liable for the defect.
Using an As Is Sales Contract
As is sales contracts can be beneficial for almost every type of sale, but are particularly advantageous when you are selling real estate. For instance, if you are selling your home to another person, an as is contract means that you will not have to cover any repairs to the property after making the sale. The buyer is purchasing the home in its current condition, and they cannot hold you liable for any defects in the property.
Most as is contracts, however, will include an inspection clause. Basically, this means that the buyer can back out of the sale if the home inspection reveals big problems with the property and the buyer no longer wants to complete the purchase.
In an as is sales contract for real estate, there will typically be a section that absolves the seller of liability related to the state of the property. For instance, this section of the contract could include a statement that the seller does not know anything about the property that they have not revealed to the seller. The contract could also include a statement that the seller has not received any government notifications related to the property.
Buyers should insist that they receive a Property Disclosure statement. In this statement, the seller will outline everything that they know about the home, including the age of important components such as the roof or the furnace.
As is contracts are very common in real estate sales. If you are the buyer, agreeing to one of these contracts means that you are buying the property in its current state and that the seller does not have to pay for any repairs to the property. You should make sure that your as is contract includes an inspection contingency, which allows you to schedule a home inspection before completing the purchase. If the inspection reveals a large amount of issues, and you don't want to cover the costs of repairing these issues, you can back out of the sale.
As is sales contracts are slightly different from residential for sale contracts. With an as is sales contract, the buyer is basically reserving the option to purchase a piece of property if they're happy with the results of the inspection. With a residential for sale contract, an inspection will also take place, but any needed repairs are the seller's responsibility. Essentially, as is contracts benefit the seller and residential for sale contracts benefit the buyer.
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