AS IS addendums add a lot of extra stipulations to the typical real estate contract. A home purchase is always a major decision, but when the wording of the document directly excludes the seller from any and all responsibility pertaining to the property description, the property condition, necessary repairs, history of problems, and anything and everything else anyone has ever thought to add in...the decision becomes an even tougher one to make. If you've never had the opportunity to read through an AS IS addendum you should give it a try just to know what you're up against if you ever see one attached to a contract with your name on it!

The purchase contract of a foreclosed home listing will always involve an AS IS addendum. Most instinctively lean towards foreclosed listings due to their desirable prices, often below market value, but never forget that you'll be signing an AS IS addendum to close the deal. The added addendum makes your purchase more than final. After you sign your documents you are fully responsible for everything related to your new home no matter if it is a new problem or one that obviously has a history longer than your history of ownership.

Home purchases can go smoothly and easily, but they can also go horribly wrong. We've all heard both types of stories. Some are extraordinary, others are just ordinary without the extra and others are horrifying (and hopefully rare). When an AS IS addendum is involved in your foreclosed home purchase you don't need to worry about your home purchase involving the extraordinary, the ordinary, the horrifying or the rare...because no matter what happens you can bet it's covered in your AS IS addendum. That's how thorough it is! You could discover a termite problem that was undiscovered until your chimney fell off a week after you move in and it's your responsibility according to the AS IS agreement.

It doesn't make a difference if you are absolutely sure that the seller was aware of the problems that are bringing your dreams about your new home down around your ears. It doesn't matter that they specifically misled you prior to signing. It doesn't matter that you suspect that the seller and the seller's agent knew you were buying a home with massive foundation issues or that the agent swore they had turned that AC on in the last month when the AC repairman says it doesn't work and has been out of use at least a year. By signing the AS IS addendum you've closed the deal regardless of hidden issues; sometimes they're so hidden that nobody knows about them and sometimes they're hidden purposefully to get the house sold.

So if you're one of the many buyers who are thanking their lucky stars that there are so many foreclosures available for great prices...think again. There are many in the same situation who regret their purchase immediately afterwards and for years to come. Only after spending big chunks of cash and even bigger chunks of time fixing problems do they admit that experts in the industry were saying over and over that the foreclosed homes were almost always over-used, abused and neglected. They harbor too many negative surprises to keep a hold of the greater value their lower price seems to offer.

Foreclosed homes have a lower price tag. There's not many that would try to argue that. That's their draw. But their drawback is the money buyers realize they have to spend after the fact to bring the foreclosed property up to the same level as comparable properties that had slightly higher price tags. The Sales & Marketing Manager from Montalbano Homes, Jonathan Baer, suggests, "Buyers looking at foreclosed homes should put down in writing every little thing that is going to need to be fixed, adjusted, repaired or changed prior to move in. That's the only way they'll have a real estimate of money they'll need to spend immediately after the purchase." The stripping of foreclosed properties is currently an epidemic. Buyers will often find that they need to rebuild as previous owners will go so far as to remove built in features and cabinetry.

And in addition to the cost buyers will face after the sale is done, financing a foreclosed home is more difficult than the financing of a privately owned listing. Damon Lines with Mesa, AZ's Amerifirst, offered a few reasons why it is more difficult to get a foreclosed property financed in comparison to a privately or builder owned home. "One, the banks are difficult. That's a blanket statement, but there aren't many who would argue. Two, the homes are almost always stripped. Banks won't finance homes that are in poor condition. Three, the FHA 90 day seasoning period. It requires previous ownership of at least 90 days before new FHA financing can be established for a new buyer."

Knowing all the relevant facts and information makes being pleased with your new purchase more likely. But no matter how much you think you know, foreclosures just have a higher chance of blowing up in your face after you've made the deal. And with a foreclosed home...there's no "after" the deal. the deal is done and there's nothing left to be said. That's what the AS IS addendum was for!