Can a seller tell a buyer, "I'm selling my home as is, so don't ask for repairs?" Sure, they can. Can a seller refuse to give the buyer an option period, which is normally used by the buyer to conduct their own investigation into the home's condition? Again, that is the seller's right. But here are some things to consider before doing so.
If the buyer requests an option period and the seller denies it, in my opinion, that's a potentially dangerous scenario. They are asking a buyer to commit to buying a home without being able to inspect the home's condition. If the buyer finds a major defect after they move in, their natural assumption will be that the seller didn't give them an option period because of it.
However, if the buyer doesn't request an option period, that's less of an issue. At least in my opinion. The buyer might feel confident enough in the price they are paying and what they can determine is the condition of the home, so they don't need one. We sometimes see this scenario with investor purchases, or someone just wanting to "sweeten their offer," knowing there are others in line who might be interested in the home and will probably ask for an option period.
But here's the rub, as the saying goes. In either of the cases above, the seller still has a duty to disclose any and all known defects or repairs they've made to the home.
How A Typical Option Period Works
If the buyer discovers any defects in the home during their option period (which normally lasts 7 to 10 days), they can either A) accept the home understanding they're going to have to bear the costs of doing those repairs themselves, B) ask the seller to make the repairs at the seller's costs to which the seller may or may not agree (C) ask the seller to reimburse them monetarily for the needed repair costs, or (D) ask the seller to reduce the sale price of the home. Depending on what the seller decides, it's then up to the buyer to decide how to proceed. Keep in mind, the seller is not required to make repairs, nor is the buyer required to buy the home.
If the buyer and seller cannot reach an agreement before the end of the option period, the buyer has the right to terminate the contract, receive their earnest money (normally 1% of the contract sale price), and there will be no further obligations between the parties. If this happens, the only thing the buyer has lost is their time invested, their option fee (normally around $500), and the cost of their home inspections.
In reality, we rarely lose contracts over buyer repair requests unless the issue is major and expensive. The buyer and seller usually find a way to negotiate a solution. Any agreed-upon repairs must be finalized during the option period and if the buyer elects to terminate the contract, they must inform the seller before the option period expires.
So what is required of a seller who has decided to sell their home on an "as is" basis? At least here in Texas if they are using one of our Texas Real Estate Commission contracts, the seller is still required to be honest and thorough when filling out the seller's disclosure notice. What do they know about the home? What repairs have been made?
Can you sell your home without a seller's disclosure notice? I suppose you could but not if you're using one of our Texas Real Estate option contracts. It's a part of our contracts of sale. No agent I know would ever risk working with a seller who refuses to complete a seller's disclosure notice. Talk about red flags going up everywhere.
Selling a Home is Not Like Selling a Car
Selling a home is different than selling a car when it comes to disclosures. True story here about someone I've known for 35 years. He bought an older Mercedes and when he took it in for scheduled maintenance, the mechanic asked him "You know this car was cut in two don't you?" Apparently it had been in a major accident, so they split the car down the middle and welded both halves together. Now he had a problem. Who's to say those welds are strong enough to keep it together if he was in another accident? Furthermore, now that he knew the condition of the car, how was he going to sell it?
Long story short, he took it to a dealer and offered them a great deal to buy it. When the dealer asked him to sign some paperwork about the history of the car, he refused and told the dealer I don't know anything about this car so I'm not signing anything. The dealer bought it, end of story. Nothing came of that, at least that's what I was told, but you wouldn't be able to get away with something like that when selling a home.
There are some exceptions to the full disclosure rule. For example, a home taken back on foreclosure does not require a seller's disclosure notice. The lender who took the home back never lived in the home, so there's no way they can be expected to complete a seller's disclosure notice. They are selling the home "as is" and it's up to the buyer to make their own discoveries.
I've always believed that selling a home is only half the goal. The other half is not having to worry about a buyer coming back you with a lawsuit because you failed to disclose a major issue with the home. The seller is only required to disclose things they know about the home so if it goes to court, the argument often comes down to "should the seller have known about the defect and if so, why didn't they disclose it?" That's up to the courts to decide.
My advice is when selling a home is always be completely honest with a Seller's Disclosure Notice and make sure to disclose what you know about your home. Disclose, disclose, disclose. Hiding things from the buyer with the hopes they don't find out is a recipe for a potential lawsuit.
