The U.S. residential real estate frenzy may be starting to calm down, but it remains a hot seller’s market out there — and in such climates, house-hunters often see properties listed for sale “as-is.” “Selling a home as-is means selling a home to someone without any obligation to provide repairs or credits for problems with the property,” says Adriano Tori, founder and CEO of RexMont Real Estate in Seattle.

While that might suggest the advantage is all on the seller’s side, an as-is home can be a boon to homebuyers, too — though of course the caveats can be considerable. Here are all the pros and cons to consider.

What does selling a home as-is mean?

Normally, there’s considerable negotiation in real estate offers and transactions — back-and-forth bargaining over the offer vis-à-vis the home’s features and condition. With as-is homes, it’s more of a take-it-or-leave-it situation. When you buy a house as-is, you’re getting a property that typically needs repairs and updates, with the asking price reflecting the current condition. Don’t ask for changes or fixes: What you see is what you get.

While it’s probably not going to be in tip-top shape, the actual condition of the home can vary. According to Tori, an as-is home could have minor issues, like chipping paint or an appliance that needs replacing, or more serious issues, like water leaks, roof damage or mold.

An “as-is” home isn’t necessarily the same as a “fixer-upper,” though obviously there’s overlap between the two. “Fixer-uppers are properties that need significant repairs and renovations, while as-is homes may just need some cosmetic updates or minor repairs,” says Realtor Rinal Patel, co-founder of We Buy Philly Home in Philadelphia.

Why do sellers offer homes as-is?

Sellers offer homes as-is for a variety of reasons. “Often, you will find most homes listed by agents as-is to be those that have been through a foreclosure or where the previous owner has died and it has been inherited,” says Catherine Mack, co-owner of House Buyer Network, a national homes-for-cash purchaser.

The seller could also have other reasons for listing the home as-is, such as needing to unload it quickly, avoiding investing money in it or just not wanting to deal with defects.

Why buy a house as-is?

No matter the seller’s motives, as-is home sales can offer several advantages for the buyer.

Cheaper sale price

As-is homes are priced to sell. And since the current owner is not willing to make repairs or negotiate, the buyer can usually get it for a bargain price. “This could save you money in the long run, especially if the repairs aren’t too significant,” says Patel, especially if they are renovations you can DIY. And of course, paying less upfront could potentially mean more appreciation in your pocket if/when you come to sell the home.

Faster transaction

When you’re buying a home as-is, you can usually complete the transaction faster than usual. There are no prolonged negotiations over purchase agreement or contract details. Since “the buyer knows what they are getting, and so does the seller in terms of what’s expected of them, [you] get a quick sale most of the time and an expedited closing timeline,” says Robert J. Fischer, owner/broker of The RJF Team, a Central Texas realty firm.

Less competition from other buyers

Many buyers shy away from as-is homes, figuring they’ll be serious fixer-uppers at worst, or aged and dated at best. So you’re less likely to get into a bidding war or have someone waltz in at the last minute with a better offer.

More money for remodeling

It’s a rare home that doesn’t require some customization. But if you pay top-dollar for a new or fully up-to-date property, you may not have the funds to make renovations or other changes.

Plus, “there is a certain amount of guilt in ripping out brand new cabinets just because you don’t like the way they look,” says Mark Severino, a real estate investor and founder of Best Texas House Buyers in Dallas.

With an as-is home sale, you can use the savings on the lower sale price to make the home to your liking right away, without feeling you’re being extravagant.

Drawbacks to buying a house as-is

While there are advantages, there are also disadvantages to buying a home as-is.

The home might have major hidden problems

The big one is that the home will turn out to need much more work than you anticipated. That could mean your great deal is now a costly problem you have to pay to fix as the new owner. Even if a home inspection uncovers issues before you close, you still might be stuck going through with the deal, depending on what they are (more on that later).

Financing could be a challenge

Financing an as-is home purchase can be tricky — if the home turns out to have serious structural problems that affect health or safety.  “If the buyer is getting a mortgage through FHA or VA and even some conventional products, certain repairs must be completed prior to closing,” says Kristen Conti, broker-owner at Peacock Premier Properties in Englewood, Florida.

For instance, an FHA-insured loan must meet minimum housing guidelines from the Department of Housing and Urban Development (HUD). The home must be structurally sound, safe and healthy for people to live in. Loans through the VA also have property requirements. The heating must work, the roof has to be sound and there can’t be any rot or fungus growth or lead-based paint, for example.

You could be caught between a rock and a hard place if the lender-mandated inspection turns up such issues, the seller won’t fix them and you can’t get the loan without them. For this reason, many as-is homebuyers pay with cash or hard money loans, as opposed to traditional mortgages.

Sellers are typically inflexible

As-is home sellers tend not to be open to contingencies, counter-offers or contract negotiations — that’s the whole point of offering the house as is. You can always try, of course, but don’t count on much wiggle room or flexibility.

Tips for buying a home in as-is condition

Bear these suggestions in mind before embarking on an as-is purchase.

Ask questions. Even with an as-is home sale, you can ask questions, including why the house is being sold as-is: It’s an estate sale, the owners need funds fast to buy another home, they just don’t want the work of making a place move-in ready, etc. Perhaps your real estate agent could get the skinny from the seller’s agent. “This could provide some insight into the home’s condition and whether or not the repairs needed are significant,” says Patel.

Don’t disregard disclosures.  In most states, “the seller must disclose anything they know is wrong with the home, unless the property is a rental or an inheritance,” says Jimmy Hughes, a broker with JMR Realty in Oklahoma. Selling a home as-is doesn’t relieve the homeowner of this legal obligation, especially in regard to certain serious issues. According to Tomas Satas, founder and CEO of Windy City HomeBuyer, “Disclosure laws usually cover all major systems of the home, [including] infestations of any kind, the roof, the foundation and the presence of toxic substances such as lead paint, asbestos or radon.”

Verify with a local real estate agent which code, health and safety disclosures are a requirement in the state the property is located in. If you do discover problems with the home, you could ask  the seller to address them, the as-is status notwithstanding (or walk away from the deal).

Know what to put in the contract. “A home purchase contract should clearly state which items are included in the sale of the property as-is,” including furnishings, fixtures and appliances, says Body Rudy, associate broker at DwellingsMI. “Including a complete and accurate list of items in the contract also helps to protect both parties in the event that something is damaged or goes missing after the sale is final.”

Get a home inspection and/or contractor evaluation. Even if your lender isn’t requiring it, a home inspection is something all our expert sources agree is a necessity when buying a home as-is. “Home inspections are typically done before an offer is made on a property, while contractor evaluations are usually done afterward,” says Rudy. A home inspection is more thorough, but costs more, while a contractor’s evaluation is cheaper but might not be as comprehensive.

Although as-is sellers aren’t crazy about contingencies, insist on making a home inspection part of a non-negotiable contingency clause. This way, you can back out of the contract if the inspector reveals major problems, like a cracked foundation. Although you’ll be out the cost of the inspection — which usually averages between $300 and $800 —  it’s “worth it if it means not ending up with hundreds of thousands of dollars of unexpected renovations,” advises Mack.

Ask for a home warranty. There’s some debate if a home warranty is worth it, or even a possibility in an as-is home sale. “Buyers can ask for a home warranty, but on as-is homes it’s typically assumed this will not be included,” says Hughes. Still, it doesn’t hurt to ask the seller to purchase one for you, or at least for themselves up through the closing. Besides a home warranty, there are other ways to get coverage for appliances, like using a credit card with warranty perks.