As you browse the MLS, you may see homes that seem like a screaming deal thanks to a lower price than you expected. You click on the listing and you see two notes: “sold as-is” and “BTVAI”. What do these two notes mean for you, the buyer, and what is there to watch out for? This article aims to break it all down.

What does BTVAI mean?

It may be best to start with defining this acronym. BTVAI stands for “Buyer to Verify All Information”. If you look at the bottom of an MLS listing, you will see a disclaimer like this

As a homebuyer, it is up to you to do your due diligence on your own to learn everything you can about the property you are interested in. But if you see BTVAI tagged onto the end of the listing description, you are going to have to perform a little extra legwork to learn about the property and if it is right for you, especially with as-is properties. They aren’t exactly move-in ready. Here is how to approach a home being sold as-is

What does "sold as-is" mean?

Sellers will list their home as-is when they don’t want to perform any repairs or updates prior to selling the home. It could be that the sellers want or need to get out of the house ASAP, or it could be that maintenance is too much for them to handle. There are no guarantees what works or doesn't work, or needs replacing. Often, as-is listings won’t have much to say about the property. Sellers must adhere to federal and state minimum disclosure requirements such as lead paint or asbestos disclosures, but everything else can be left out. This is where BTVAI comes in.

Why sell a home as-is?

There are a variety of reasons that a seller could be selling the property as-is. Here are some of the most common reasons:

• Don’t want/can’t afford to make repairs
• Have to sell the home in a hurry
• The property is facing foreclosure and the sellers don't want to deal with the foreclosure process.
• The owner died and the family just wants to offload the property to not deal with it
• The home was owned but unused, so the owners have little knowledge of the home

Buying an as-is property

To do your due diligence, you should look at the following criteria before purchasing an as-is listing

Home inspection

This is the big one. Some as-is properties are downright unlivable. This is good news for contractors, buyers looking to demolish and build a home, or hardcore flippers. They can buy the property and set out doing what they want to it. However, other buyers will have to look at what they are getting into. 

As-is sellers are not likely to budge on the price because they don't want to make any concessions for repairs. But if you go under contract, still may have a home inspection. This will allow a professional to look through the home and property to determine what needs fixing. An as-is home doesn't mean broken beyond repair, but will often need a major repair that the sellers can’t afford or don't want to deal with. The inspection report will outline what needs to be fixed and you can determine an estimate for the repair costs. If for some reason, the seller won’t allow a home inspection, this could be a cue for two things:

• The seller may be aware of a serious fault in the house that they don’t want to disclose to you
• The seller has an idea that something has gone wrong and doesn't want to risk an inspection or appraisal to lower the property value or to give ammunition to potentially receive a lower price.

Either way, start asking more serious questions or leave the deal altogether. Nobody likes an uncooperative seller, but when it comes to the risking safety of the home, you can take some time to find a better property for sale.

Can you buy the home for cash?

Cash is king in real estate, and sellers may not be as accommodating to a financing contingency. If you can offer up cash, it can help move things along more smoothly.

Understand your loan requirements

Most home loans have a baseline for livability standards, known as minimum property requirements (MPRs). The home appraiser will assess the property to ensure that the home meets the MPRs for your loan type. Here are some of the most common loan types and how they define their MPRs

FHA loans

FHA loans are government-backed loans that are designed to be affordable to get more younger people into homes they can afford. FHA loans state that the home must be structurally sound at the time of purchase and are safe for you and your family to occupy. Homes that need total renovations or have physical structural deficiencies won't qualify for an FHA loan. Here is a breakdown of the FHA minimum property standards on the Housing and Urban Development website.

USDA loans

USDA loans are designed for homes in rural areas, but many suburbs qualify as rural areas under the USDA’s definition. Here are some of the MPRs for a USDA loan:

• A roof that prevents moisture from entering the house
• An up-to-date and functioning electrical system
• Well-functioning heating and cooling systems
• Structurally sound foundation
• Suitable plumbing and water pressure

VA Loans

VA loans are a benefit for current and veteran military service members. Because VA loans are government-backed and set aside specifically for service members and their families, they have strict MPRs. These include:

• Clean drinking water
• Working water heater
• Working sewer system
• A heating system that can heat the home to a minimum of 50 degrees Fahrenheit
• A roof that is free of leaks
• Free of pests
• All mechanical systems must be in good working order

Conventional Loans

Conventional loans are very common but are not backed by the federal government. However, they have standards that conform to Freddie Mac and Frannie Mae, who are government-sponsored. Frannie and Freddie slope properties to purchased as-is as long as there is only minor deferred maintenance or minor deficiencies. The home must be structurally sound and structural issues must not be more than normal wear and tear for the age of the home. Here are some acceptable defects that can allow you to buy an as-is home with a conventional loan:

• Worn floor finishes or carpets
• Window screen holes (sounds like an oxymoron, doesn't it?)
• Minor plumbing leaks (check for mold)
• Damage to interior walls or trim
• Missing handrails or trim
• Missing light fixtures, electrical switches, or faceplates
• Deteriorated or cracked sidewalks or driveway

Your home appraiser will note the deficiencies and if they conform to the guidelines of the conventional loan.

Use a real estate agent

In all things real estate, hiring a trusted and experienced real estate agent is a surefire way to smooth out the home buying process and take a huge burden off your shoulders. When it comes to as-is houses, having an agent on your side is even more imperative—especially if the seller is trying to sell the home as a For Sale By Owner. A local real estate has knowledge of local laws and can maneuver you through the process of showings, making an offer, scheduling appointments, and drawing up contracts. With a house that has a relatively unknown condition, having an experienced set of eyes on your side is incredibly beneficial.

Should I buy a “sold as-is” home?

Ask yourself these questions when considering an as-is home. Your agent is likely to ask you these questions as well. 

• Do I have enough money to make repairs
• Can I deal with structural or system damage?
• Do I have extra money for an appraisal and inspection (You should. These are vital)
• Does my agent have experience with as-is properties?
• Will this home be a primary residence or an investment?
• Is there somewhere to stay if the home is uninhabitable until certain repairs are made?

If you answered "yes" to these questions, you may be ready to buy a home in this condition. We hope that this article has given you insight into what goes into buying a home being sold in “as-is” condition. If you are ready to buy a home, give our team of local agents a call today at (208) 219-7683 to get started.