If you’re selling your home and have gotten an offer, you may be concerned about the Purchasers asking you to make costly repairs that potentially could cut into your profit
Repair requests can be negotiated under most circumstances, but it’s important to recognize that a Seller’s ability to
negotiate depends on the contract proposed by the Purchasers. This is where your Solutions agent can help by carefully reading, understanding and pointing out the implications of that contract.
“As Is” vs. a home inspection
Standard real estate contracts vary by location, but all of them are completely negotiable. As a Seller, you should never sign a contract until you fully understand its obligations, particularly where it concerns your responsibility for repairs.
The best contract for a Seller would be for the Purchaser to agree to purchase the home “as is” or to request an “information only” home inspection, thus absolving the Seller of any need to pay for any repairs.
In most cases, though, your contract will include a clause that says the purchase is contingent upon a home inspection. Some contracts will expressly state that the Purchasers cannot request any cosmetic repairs to be made and can only ask for fixes to structural defects, building code violations or safety issues.
State laws may also impact your liability as a Seller for any issues uncovered during an inspection – your Solutions agent understands these regulations and will help guide you through. If you are uncertain about the contract, you can also consult a real estate attorney.
While Purchasers are always advised to have a home inspection so they know what they are buying, when there are a limited number of homes for sale and Purchasers need to compete for homes, they are more likely to waive their right to ask a Seller to make repairs. In a buyers’ market, though, Sellers may find that Purchasers are more aggressive in asking for work to be done on the home.
Your ability to negotiate depends on the way your contract has been written. In most cases you don’t have to agree to make cosmetic repairs. If a home inspection finds other problems – structural, hazardous to your health or safety-related – though, you are typically better off making these types of repairs rather than having the Purchasers walk away from the transaction. For one thing, the next home inspection is likely to find the same problems so you may not be able to sell your home without fixing the issue.
Most contracts stipulate that the home inspector will provide a free copy of the report to the Sellers as well as to the Purchasers. If you receive a copy of the report and it describes defects in your home, you’ll need to disclose those defects to the next prospective Purchasers.
Before you jump into negotiating requested repairs with the Purchasers and their agent, you should discuss the home inspection report with your Solutions agent. You can get bids from several contractors to find out how much a repair will cost and then decide what to offer the Purchasers.
Some Purchasers prefer to request a credit at the closing to pay for repairs that they will handle themselves after the settlement, rather than have the Sellers make the repairs beforehand.
Another option to consider is to offer to pay for a one-year home buyer warranty for the Purchasers that will cover future issues with the home’s systems and appliances. A warranty, however, only covers features that are working, so if you have a broken water heater, you will probably have to pay to have it fixed before your transaction can be completed.
Whether you get a minor or major repair request, rely on the professional advice from your Solutions agent or real estate attorney to help you handle the issue.