As is where is homes are a unique offering in the Christchurch real estate market that can lure buyers in with their often lower purchase price and ideal DIY potential.
What is an as is, where is home?
Listing a home as is, where is or as is means a buyer is purchasing a home in the exact state it is in, regardless of any structural or cosmetic defaults. The price and condition of the home are non-negotiable and what you see is what you get! Often the seller will remove all warranties regarding the dwelling, fixtures and chattels from the agreement for sale and purchase.
Why should I buy a home, as is?
As is homes are popular for residential landlords who wish to expand their rental portfolio. Repairs or alterations can be made with the intention of turning these homes into rental properties as a long term investment.
For buyers looking to acquire properties with the sole intention of re-selling them, as is homes pose as an attractive option. Buying as is can be a great option for those seeking homes with potential for redevelopment. Properties can sometimes be acquired at less than the current land value and either demolished or on sold, providing the opportunity for a new dwelling (or dwellings) to be built for resale. This is particularly appealing for tradespeople who can utilise contacts within the building industry and can repair properties in a cost-effective manner, allowing for a significant profit to be made when the house is on sold.
If I purchase a property, as is, can I still get insurance?
If your purchase is to be financed, your lender will have various requirements. One of those is likely to be insurance or builder’s risk insurance, if you already have a repair strategy in place.
Homeowners must meet various conditions to become insured. Different insurers will have their own requirements and you should talk with your insurer.
Generally, lenders and insurers will require a full list of completed repairs, details of original damage and any damage assessment reports which have been prepared by EQC, the Earthquake Commission. Lenders and insurers will likely want a code of compliance certificate for any works requiring a building consent.
You may not be able to obtain insurance until repairs have been completed and certified.
What other due diligence should I undertake?
Along with insurance, it is also important to find out whether a building inspection or engineer’s report has been carried out. Many as is houses have considerable structural damage and if you are seeking to repair the property, comprehensive property and building reports are essential.
It is also important to think about what land zone the property is in, if there are any other natural hazards and what can be done to minimise the risk of further damage occurring to the property.
Most reports undertaken by EQC and insurers contain confidentiality clauses which prevents them from being shared, making obtaining your own reports all the more important.
Conclusion
As is properties offer significant potential, with correspondingly high risk. Thorough due diligence and investigative reporting should be undertaken in accordance with sound legal advice.