Should the seller make repairs before closing, or credit the buyer?

Posted by Round Table Realty on Monday, January 28th, 2019 at 2:10pm.


You’re a buyer. Your Realtor helped you find the perfect home, make an offer, and the offer has been accepted! It’s time for you to order the appraisal and the inspection.

THE INSPECTION. (Dun-dun-dun!)

One of the most stressful parts of the home-buying process comes when Realtors and buyers hold their breath to learn whether or not any major repairs will be necessary before the home can be sold. If it’s a minor issue, there’s nearly never a problem closing on time. But if it’s a big issue, like the roof, you’d better be prepared to negotiate.

“But isn’t that what my Realtor is for?!” you might ask.

YES! A million times yes. Your Realtor should absolutely be advocating for your best interest if he or she is a Single Agent. But too many times, buyers get a raw deal because Realtors don’t explain the pros and cons of asking the seller to hire someone to make repairs versus crediting the buyer and allowing them to hire someone themselves. At Round Table Realty, we educate our agents regularly on how to help buyers make their own decision.

What if the buyer agrees to allow the seller to have a major issue fixed, such as a roof leak? Of course, the seller must provide evidence of the fix prior to closing. But what if the seller’s contractor cuts corners to save money, the sale closes, and the buyer wakes up the first night in their new home to a dripping sound… What recourse do they have?

They can certainly take the issue back to the seller but because the ink is already dry on the closing paperwork, the seller does not owe the buyer any response. If the buyer wants to fix the leak and take the subsequent bill to the seller via small claims court, it is certainly possible a judge will rule in favor of the buyer considering the seller agreed to make the appropriate fixes. The buyer or seller could also go after the contractor directly. But the time, money, and energy it takes to get to that conclusion (if you do) can really put a damper on that new home celebration.

On the flip side, giving the buyer a financial credit towards repairs ensures the buyer can hire their own contractor and oversee the work. After all, the buyer is far more invested in the work being done properly and appropriately. It seems like a far better idea for the buyer to handle all repairs using a credit from the seller, right?

Well, usually.

Occasionally, buyers taking a credit from the seller too close to the day of closing can confuse the loan process. If the lender has already approved a loan and loan disclosures are printed, then the deal might fall apart.

These are just a few examples of how every home purchase is different and requires very specific treatment when it comes to repairs after inspections. Your Single Agent Real Estate associate should understand when it’s appropriate to request sellers to hire someone to make home repairs prior to closing or when it’s in a buyer’s best interest to take a credit and hire for repairs themselves. He or she should also show you the pros and cons of each option so that you can make the best decision for you!



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