Hidden Defects in Illinois "As-Is" Home Sales Can Backfire

 Posted on November 12, 2025 in Real Estate

For Illinois homebuyers, a bargain price on a fixer-upper can look tempting - until they learn what "as-is" really means. Illinois sellers may assume that labeling a property as-is allows them to walk away clean with no worries about disclosure. It is important for sellers and buyers alike to have a full understanding of what "as-is" really means, and to involve a real estate lawyer in any transactions.

Buyers could inherit costly problems in an as-is sale, while sellers must understand that labeling a property "as-is" does not erase the duty to be honest about known defects. Whether you are selling a fixer-upper or inherited property, or buying without understanding disclosure limits, you could find yourself with a serious problem after the paperwork is signed.  An experienced Waukegan, IL real estate lawyer can help ensure no mistakes are made that can come back to haunt you later on.

What Does "As-Is" Really Mean Under Illinois Law?

An "as-is" property listing means the property is being sold in its current condition and that the seller will not make or pay for repairs. The as-is language does not remove the seller’s statutory duty to disclose known material defects under the Illinois Residential Real Property Disclosure Act (765 ILCS 77/1 et seq.). As-is properties limit the leverage a buyer has; while the buyer can still walk away following an inspection, he or she cannot demand that the seller make repairs.

What Could Buyers Face in an Illinois "As-Is" Sale?

Buyers lose certain things when they enter into an as-is property sale agreement. These include:

• The buyer loses negotiation power since sellers of as-is properties rarely agree to concessions.
• Repair credits are generally off the table once a contract is signed for an as-is home.
• It can be much harder to prove fraud after closing in an as-is sale unless the seller clearly knew and hid a material defect.
• Some lenders will not approve financing for a home that fails appraisal or safety standards.
• In some cases, major defects that affect the roof, foundation, or electrical system may cause insurance delays for the new homeowner.
• The buyer is responsible for all future repairs, which could range from minor fixes to major system replacements, like an HVAC system or a new roof.
• While an inspection remains crucial, the as-is clause means the buyer cannot use the inspection results to ask the seller for a price reduction.

What Are the Seller’s Obligations in "As-Is" Sales?

Sellers of residential properties – including as-is sales – must complete the Residential Real Property Disclosure Report. This form requires disclosure of known material defects, including issues related to flooding, leaks, foundation or structural problems, roof, plumbing, electrical, or HVAC defects, the presence of asbestos, lead paint, or radon, and any known code violations or boundary disputes. The as-is clause does not protect the seller against the following:

• Failure to update disclosures if a condition worsens prior to closing
• Misrepresentation or concealment of a known defect
• Painting over mold, water damage, or foundation cracks
• Omitting known conditions like a leaky roof
• Fraudulent non-disclosure, regardless of as-is language

Sellers who sell a property as-is can find themselves in trouble, especially with an inherited home where the executor failed to investigate or disclose visible issues, a flipped home where investors concealed material renovation defects, or a quick sale or distressed listing where owners assume the "as-is" label protects them from known plumbing, mold, or septic problems.

Contact a Libertyville, IL Real Estate Lawyer

Before buying or selling an "as-is" home in Illinois, it is important to understand exactly what the term entails. A knowledgeable Waukegan, IL residential real estate attorney from Newland & Newland, LLP can review the contract, disclosures, and inspection reports to make sure your interests are fully protected. Our main attorney has served on the Board of Directors of the Illinois Real Estate Lawyers Organization and the Real Estate Committee of the Lake County Bar Association. Call 847-549-0000 to schedule your free consultation.