763.450.1639

Understanding As-Is Sale Addendums

What Sellers and Buyers Need to Know

In a real estate market where speed and simplicity often drive the deal, more purchase agreements are being paired with an “As-Is Sale Addendum.” While this document can streamline the process for both sides, it also creates significant legal implications that every buyer and seller should understand before signing on the dotted line.

What Is an As-Is Sale Addendum?

An As-Is Sale Addendum is a contractual provision stating that the buyer agrees to purchase the property in its current condition—with no repairs, concessions, or warranties from the seller regarding the home’s physical state.

In other words, what the buyer sees is what the buyer gets.

However, “as-is” does not eliminate all seller responsibilities, nor does it replace required disclosures. Misunderstanding this is one of the most common—and costly—mistakes in real estate transactions.

What Sellers Should Understand

Selling as-is may feel like a way to avoid hassle, but it is not a shield against liability.

1. You Still Must Disclose Known Defects

Most states, including Minnesota, require sellers to disclose material facts they are aware of—such as:

  • Water intrusion

  • Foundation problems

  • Plumbing or electrical issues

  • Mold or pest infestations

An as-is addendum does not allow a seller to hide known problems.

2. Inspections Are Still Allowed

Some sellers assume “as-is” means the buyer cannot inspect. In reality:

  • Buyers typically retain the right to a home inspection,

  • And they may still cancel based on what the inspection reveals (unless waived elsewhere in the agreement).

3. Pricing Must Reflect Condition

Listing a property “as-is” often signals that repairs won’t be negotiated. For many sellers, this reduces stress—but it must be balanced with realistic pricing to avoid appraisal issues or buyer withdrawal.

What Buyers Should Know Before Agreeing to As-Is Terms

Buying a home as-is comes with opportunity—but also risk.

1. You Are Accepting the Property’s Current State

From cosmetic wear to structural issues, the buyer is assuming responsibility for:

  • Repairs

  • Deferred maintenance

  • Future problems that arise

If the furnace fails a week after closing, buyers typically cannot seek compensation.

2. An Inspection Is More Important Than Ever

Even when purchasing as-is, buyers should:

  • Hire a reputable home inspector

  • Consider specialty inspections (sewer scope, radon, septic, chimney, etc.)

  • Budget for repairs that may be needed immediately after closing

3. Some Issues May Affect Financing

Major safety or structural concerns may lead lenders—or appraisers—to require repairs before funding the loan. This can complicate an as-is deal if the seller refuses to make repairs.

Why As-Is Addendums Lead to Disputes

Miscommunication is the biggest culprit. Common conflicts include:

  • Sellers failing to disclose known problems

  • Buyers assuming they can renegotiate after inspection

  • Lenders requiring repairs the seller won’t make

  • Buyers discovering defects that were not visible during showings

Having a clear, well-drafted addendum—and a law firm reviewing the contract—can prevent these issues before they derail the sale.

How a Real Estate Attorney Can Help

Whether you’re the buyer or the seller, an experienced real estate attorney can:

  • Review the purchase agreement and addendum for hidden risks

  • Ensure all disclosures are complete and compliant

  • Protect clients from unwittingly assuming expensive liabilities

  • Provide guidance during inspection disputes

  • Assist with negotiation if unexpected issues arise

Buying or selling a home “as-is” doesn’t have to be intimidating—as long as you understand your rights and obligations.

If you have any questions about an as-is addendum, as a buyer or a seller, contact us today for a consultation. 

Recent Blog Posts