Buying a Bank Owned Home? What “As Is” Really Means

Jonathan Dalton, Phoenix Real Estate AgentIf you’re looking to purchase a bank owned home here in Phoenix or elsewhere, there are a few givens with which you’ll have to deal:

1) There will be no Sellers Property Disclosure Statement. While occupancy is not necessary for the form to be required, the lenders truly don’t know what has happened in the home’s history. And while they should know if anything’s happened since they took ownership, the knowledge is sketchy at best.

2) The property is being sold As Is.

What does As Is really mean? I’m glad you asked.

There’s a 10-day inspection period built into the Arizona Residential Resale Purchase Contract, during which a buyer should have the home inspected by a professional home inspector and also checked for termites by a termite inspector. This also is the time for any specialty inspections the buyer may want – roof, pool, mold (most home inspectors can say if there’s evidence of a problem but they’ll almost universally suggest bringing in a specialist for the final verdict.)

At the end of the 10 days, the buyer has the option of accepting the house as is, canceling the contract and regaining their earnest deposit or asking for repairs.

Wait, Jonathan. This is an As Is purchase. The bank already said they won’t make repairs.

Yes, that’s true. Unless it’s not. While rare, some lenders have made repairs to ensure the deal gets done. These usually aren’t the “light bulb in the kitchen’s burned out” variety but it can happen.

Bank owned homes are a gamble in the sense that you never know if the previous owners took their misfortune out on the house before they left. But that doesn’t mean someone buying the property is completely helpless in the buying process.

[tags]Phoenix real estate, AAR Purchase Contract, bank owned homes[/tags]

Jonathan Dalton

Jonathan Dalton is a 40-plus-year resident of the Valley and has been helping folks buy and sell homes since 2004. He can be reached at 602-502-9693 or info at


  • Mark A. 10 years ago

    In our neck of the woods, it’s the same story, and in addition, the bank won’t provide the buyers with a plat of survey, either.

  • Jonathan Dalton 10 years ago

    Interesting. Plat’s not as much of an issue since almost all the homes are tract-built. Makes that part easier.

    These are all just some of the quirks that come up when pursuing such properties. Not everyone seems to know what they’re really up against.

  • Mark A. 10 years ago

    In Chicago, we hardly have any tract-built homes and subdivisions (which would somewhat explain the reduced need for a plat of survey). We do have a ton of irregular lot sizes though, and quite a few lot-line disputes which explains why a survey is mandatory for any type of closing. And typically, the seller pays for the survey, here.

  • David A. Patterson, Broker CRS ABR 10 years ago


    For South Carolina, your first point is very accurate!
    As for your second……your comments are very much on point.

    “This is an As Is purchase……Unless it’s not.” After educating my client about the possible “as-is” scenarios, I will encourage him to submit an offer that forces the seller (bank) to provide a clear termite and heating and air letter. (You do not want to spend August in South Carolina without A/C!)

    If they seller will not agree, then it’s my clients decision on how to proceed. Education and investigation is the key to a successful REO purchase.

    Great Blog Jonathan!