General information, not legal advice

Selling a House As Is in Manchester, TN

Some Manchester and Coffee County homeowners tell me they want to sell as is. Maybe the home needs work you do not want to take on, it was a rental, or you simply want a sale without a list of repairs. Selling as is is a real option in Tennessee, but it does not mean what many people think. This page explains what Tennessee law says about as is sales of homes with 1 to 4 dwelling units, what as is does not change, and how to prepare.

This is general information, not legal advice. Every sale is different, so please talk with a Tennessee attorney about your own situation.

What as is means in Tennessee

In everyday terms, as is means you are selling the home in its current condition and are not promising to make repairs. In Tennessee, the phrase also has a specific legal meaning under the Tennessee Residential Property Disclosure Act, which starts at Tenn. Code Ann. section 66 5 201. That act covers transfers of residential property with one to four dwelling units, site built and nonsite built, whether or not a real estate agent is involved.

Under TCA 66 5 202, the owner must give the buyer one of two documents:

A residential property disclosure statement about the condition of the property, including any material defects known to the owner. You do not have to hire anyone or do an independent inspection to fill it out.
A residential property disclaimer statement saying the owner makes no representations or warranties about the condition of the property and the buyer will receive it as is, with all defects which may exist, if any, except as the purchase contract provides.

The catch: the buyer has to waive the disclosure

TCA 66 5 202 says the disclaimer statement is only permitted where the buyer waives the required disclosure statement. If the buyer does not waive it, you must provide the disclosure statement. So you can advertise and price a home as is, but you cannot decide on your own to skip the disclosure. The buyer decides whether to waive it.

Under TCA 66 5 203, whichever document applies must be delivered before the purchase contract is accepted, meaning before it is fully signed by all parties. My Tennessee seller disclosure guide walks through the disclosure statement itself.

What as is does not remove

Even when a buyer accepts a disclaimer, other duties in Tennessee and federal law still apply.

Known sinkholes, injection wells and soil tests. TCA 66 5 212 requires the seller, before entering a contract, to disclose in the contract or in writing with acknowledgment of receipt any known exterior injection well, the results of any known percolation test or soil absorption rate determined or accepted by the Tennessee Department of Environment and Conservation, and any known sinkhole on the property. Where known, the seller must also disclose whether a single family home on the property was moved from an existing foundation.
Planned unit developments. Under TCA 66 5 213, the seller must disclose if the property is in a planned unit development and make the restrictive covenants, homeowner bylaws and master deed available on request.
Lead based paint in homes built before 1978. The EPA says the federal Lead Based Paint Disclosure Rule requires sellers and real estate agents to give buyers information about known lead based paint and lead based paint hazards before the buyer signs a contract, for most pre 1978 housing. Exceptions the EPA lists include foreclosure sales, housing built after 1977 and housing a certified inspector has tested and found free of lead based paint.
Your agent's duty to disclose adverse facts. Under TCA 62 13 403, a real estate licensee must disclose to each party any adverse facts the licensee actually knows about. TCA 62 13 102 defines adverse facts as conditions or occurrences that competent licensees generally recognize as having a negative impact on value, significantly reducing structural integrity or presenting a significant health risk to occupants. An as is listing does not change that duty.
Honesty. TCA 66 5 208 says that failing to provide the statement is not by itself grounds for a lawsuit, but it keeps in place other claims a buyer may have for misrepresentation or failure to disclose material facts. As is is not a shield for hiding a problem you know about.

Sales that are exempt

TCA 66 5 209 lists transfers that are excluded from the disclosure statement rules, such as certain court ordered transfers, fiduciary sales of an estate or trust, the first sale of a home with a builder written warranty, public auctions and sales where the owner has not lived in the home at any time within three years. Tennessee REALTORS notes in its legal hotline answers that an exempt seller remains exempt throughout the transaction. Whether the separate disclosures in TCA 66 5 212 and 66 5 213 still apply to an exempt sale is a question for your attorney.

Buyers can still inspect

Selling as is does not by itself stop a buyer from inspecting the home. The CFPB tells buyers to schedule an independent home inspection as soon as possible after choosing a home, and says that if the purchase contract is contingent on a satisfactory inspection, the buyer can cancel without penalty if not satisfied with the results. A buyer can also ask for repairs or a credit, and the CFPB notes the seller may or may not agree.

Tennessee REALTORS legal hotline answers say inspections are not required by law and are a negotiable item in the purchase and sale agreement. A seller who prefers no inspections can say so in the listing, and the buyer would have to agree to waive inspection rights in the contract. Keep in mind that many buyers want the option to inspect, so limiting inspections may make a home harder to sell.

Repairs, appraisals and loans

Refusing repairs is your right, but loans can still come into play. Tennessee REALTORS legal hotline answers say a seller is never responsible for repairs a buyer's lender requires. If those repairs are not made, though, the lender will likely not make the loan, and the buyer may be able to cancel under the financing contingency. The CFPB adds that some loan programs require the property to meet set standards, the appraisal can be made subject to repairs, and the lender can require major repairs before closing. For example, HUD requires every FHA insured home to meet minimum property requirements that it be safe, sound and secure. My FHA loans guide explains those rules.

Tradeoffs to consider

Selling as is can make sense, but weigh both sides before you decide.

Clear expectations. You tell buyers up front that you do not plan to make repairs. Under the contract, buyers can still ask, and you can still say no.
Loan limits. A buyer using a loan may not be able to close on a home that needs repairs the lender requires, unless those repairs get made.
Price. Buyers will factor the condition into what they offer. I will show you recent comparable sales so you can see how condition affects value in your area.
Disclosure still matters. Unless the buyer waives the disclosure statement, you will complete it, and the duties above apply either way.
Inspections still happen. Most buyers will inspect, and a buyer with an inspection contingency can still cancel or ask for repairs or a credit.

Preparing to sell as is

Gather records: your deed, repair receipts, permits, warranties, any survey, HOA documents and well and septic information if the home has them.
Write down what you know about the home's condition, including any past water, roof, foundation or sinkhole issues, so your disclosures are accurate.
Find any percolation test or soil records if the home is on a septic system.
Check the year the home was built so you know whether the lead based paint disclosure applies.
Consider a prelisting inspection so you know what buyers are likely to find.
Clean and clear the home so buyers can see it clearly. My prepare to sell checklist has ideas.

When to talk to an attorney

Talk with a Tennessee attorney before you list if:

You are not sure whether your sale is exempt under TCA 66 5 209
You know about a defect and are not sure how to describe it
A buyer is asked to waive the disclosure statement and you want the wording reviewed
The home is part of an estate, a trust, a divorce or a foreclosure. If you inherited the home, read my guide to selling an inherited home in Tennessee
A buyer raises a problem after closing

How I help

Tennessee law gives a listing agent the duty to inform the sellers they represent of their rights and obligations under the disclosure act, under TCA 66 5 206. When we work together, I will explain your disclosure options, help you gather records, price the home with its condition in mind and market it on the MLS to buyers looking in Manchester and Coffee County. Legal questions go to your Tennessee attorney.

Keep reading:

Thinking about selling your Manchester home as is?

I help sellers across Manchester and Coffee County decide whether as is is the right fit and handle the paperwork the right way. Call or text me at (615) 497 1658, or request your free home value report below.

Common questions

Can I sell my house as is in Tennessee?

Yes. You can offer a home in its current condition without agreeing to make repairs. But under TCA 66 5 202, the as is disclaimer statement is only allowed if the buyer waives the disclosure statement. If the buyer does not waive it, you must provide the disclosure statement.

Do I still have to disclose problems if I sell as is in Tennessee?

In many cases, yes. Known sinkholes, injection wells and percolation test results must be disclosed under TCA 66 5 212, homes built before 1978 need the federal lead based paint disclosure, and real estate agents must disclose adverse facts they know about under TCA 62 13 403. Ask a Tennessee attorney about your own sale.

Can a buyer inspect a house sold as is?

Yes, unless the buyer agrees in the contract to waive inspections. Tennessee REALTORS says inspections are negotiable in the purchase and sale agreement, and the CFPB says a buyer with an inspection contingency can cancel without penalty if not satisfied with the results.

Do I have to make repairs a lender requires?

Tennessee REALTORS legal hotline answers say a seller is never responsible for lender required repairs. If those repairs are not made, the lender will likely not make the loan, and the buyer may be able to cancel under the financing contingency.

When is the disclaimer or disclosure due?

Before the purchase contract is accepted, meaning before it is fully signed by all parties, according to TCA 66 5 203.

Should I talk to an attorney before selling as is?

It is a good idea if you are unsure whether your sale is exempt, you know about a defect, the home is part of an estate, trust or divorce, or you want the disclaimer and waiver wording reviewed.

Matt Sargent is a Tennessee licensed affiliate broker with Keller Williams who helps buyers and sellers in Manchester and Coffee County. Call (615) 497 1658 or send a message.