Congratulations, your home is under contract! In all likelihood you had to negotiate a bit more than you really wanted to. And now the buyer is doing inspections…what to expect? Hopefully you left yourself a little breathing room when negotiating the price to take care of repairs. I recommend to my seller’s to leave about $2,000 for repairs, this is usually enough to cover the majority of repair requests.
First off, expect many minor issues to come up that you had no idea existed. The buyer receives a 20+ page report listing anything and everything that is wrong or may go wrong. Some things don’t even apply when inspectors bring up new code requirements that were not in place at the time your home was built. However if it is a safety concern and not too costly, go ahead and do it.
Are you required to do repairs? No. Do you want your buyer’s to proceed with the contract? If so it’s probably worth your while to negotiate and come to a win/win agreement.
Hopefully your buyer isn’t so brash as to submit the entire inspection report and ask you to do everything, although all too often an inexperienced agent or unrepresented buyer will do just that. In that case you can pick and choose what you feel is important but I’d recommend simply offering a credit at closing so they can take care of it themselves.
If the buyers are reasonable in their requests consider doing the majority of the requested items. They will typically throw in a few extras to leave room for negotiation but if it’s not too extensive a list I recommend hiring a handyman to take care of it. Remember licensed trades such as electrical, plumbing & HVAC must be completed by a licensed professional unless you are handy yourself and can do the repairs properly, if that is the case be sure to notify the buyer in writing that you will be performing the repairs and make sure they agree. Typically receipts are required to prove the repairs were completed. It’s better to disclose upfront your intentions than have a buyer walk at the last minute because they were not satisfied with the repairs.
Hopefully your home doesn’t have any large costly repairs needed however if a major defect is found and your buyer still wants the home I suggest you seriously consider taking care of it. If you refuse and your buyer walks you are now required by law* to disclose any and all inspections performed and attach that inspection report to your seller’s disclosure. Disclosure is a whole other topic but just so you know, should a seller knowingly withhold a major defect that homeowner could be liable for triple damages if the buyer later sues. All I can say is disclose, disclose, disclose.
There are some items called out on the inspection that might be very costly – roof, foundation, HVAC and deferred maintenance can hurt. Look at all your options. Call your insurance agent to see if your policy covers the roof. Consult professionals and obtain 2 or 3 bids. Some things are at the end of their life and will need to be replaced. Hopefully you are aware of this beforehand and prepared for such an occurrence. It’s not a bad idea to have a pre-listing inspection done so you know what to expect and can be preemptive. Just remember to disclose.
Sorry, this article seems gloomy. Negotiating repairs really isn’t all that terrible. In today’s market values are soaring. Hopefully you are making more on your home than you imagined and of course a buyer wants to know that he’s getting what he paid for. Negotiate and do any reasonable repairs. I always suggest to my sellers that they take care of any safety issues. If something isn’t working properly, fix it and hopefully the buyer will be satisfied with a compromise as long as you are showing you are willing to work with them. Often times a $500-2,000 credit at closing is the easiest way to deal with repairs.
A few things to do before listing your home that will make the inspection process a bit less painful are:
Clean and Service the HVAC (Heating & A/C) & replace air filters
Repair any rotten wood on the exterior of the home
Repair any appliances that are not working properly
Take care of any drips, leaky faucets or running toilets
De-clutter – often times something might be hidden behind that wall of boxes that you may not even be aware is a problem.
Hopefully you have an experienced agent on your side to guide you. Feel free to contact me with any questions and if you live in the DFW area I would love to assist you with your real estate needs.
Best of luck on your repair negotiations!
Deanna Parnell
RE/MAX Heritage
469-258-4770
* This article applies to Texas real estate and may not be applicable in all states.
First off, expect many minor issues to come up that you had no idea existed. The buyer receives a 20+ page report listing anything and everything that is wrong or may go wrong. Some things don’t even apply when inspectors bring up new code requirements that were not in place at the time your home was built. However if it is a safety concern and not too costly, go ahead and do it.
Are you required to do repairs? No. Do you want your buyer’s to proceed with the contract? If so it’s probably worth your while to negotiate and come to a win/win agreement.
Hopefully your buyer isn’t so brash as to submit the entire inspection report and ask you to do everything, although all too often an inexperienced agent or unrepresented buyer will do just that. In that case you can pick and choose what you feel is important but I’d recommend simply offering a credit at closing so they can take care of it themselves.
If the buyers are reasonable in their requests consider doing the majority of the requested items. They will typically throw in a few extras to leave room for negotiation but if it’s not too extensive a list I recommend hiring a handyman to take care of it. Remember licensed trades such as electrical, plumbing & HVAC must be completed by a licensed professional unless you are handy yourself and can do the repairs properly, if that is the case be sure to notify the buyer in writing that you will be performing the repairs and make sure they agree. Typically receipts are required to prove the repairs were completed. It’s better to disclose upfront your intentions than have a buyer walk at the last minute because they were not satisfied with the repairs.
Hopefully your home doesn’t have any large costly repairs needed however if a major defect is found and your buyer still wants the home I suggest you seriously consider taking care of it. If you refuse and your buyer walks you are now required by law* to disclose any and all inspections performed and attach that inspection report to your seller’s disclosure. Disclosure is a whole other topic but just so you know, should a seller knowingly withhold a major defect that homeowner could be liable for triple damages if the buyer later sues. All I can say is disclose, disclose, disclose.
There are some items called out on the inspection that might be very costly – roof, foundation, HVAC and deferred maintenance can hurt. Look at all your options. Call your insurance agent to see if your policy covers the roof. Consult professionals and obtain 2 or 3 bids. Some things are at the end of their life and will need to be replaced. Hopefully you are aware of this beforehand and prepared for such an occurrence. It’s not a bad idea to have a pre-listing inspection done so you know what to expect and can be preemptive. Just remember to disclose.
Sorry, this article seems gloomy. Negotiating repairs really isn’t all that terrible. In today’s market values are soaring. Hopefully you are making more on your home than you imagined and of course a buyer wants to know that he’s getting what he paid for. Negotiate and do any reasonable repairs. I always suggest to my sellers that they take care of any safety issues. If something isn’t working properly, fix it and hopefully the buyer will be satisfied with a compromise as long as you are showing you are willing to work with them. Often times a $500-2,000 credit at closing is the easiest way to deal with repairs.
A few things to do before listing your home that will make the inspection process a bit less painful are:
Clean and Service the HVAC (Heating & A/C) & replace air filters
Repair any rotten wood on the exterior of the home
Repair any appliances that are not working properly
Take care of any drips, leaky faucets or running toilets
De-clutter – often times something might be hidden behind that wall of boxes that you may not even be aware is a problem.
Hopefully you have an experienced agent on your side to guide you. Feel free to contact me with any questions and if you live in the DFW area I would love to assist you with your real estate needs.
Best of luck on your repair negotiations!
Deanna Parnell
RE/MAX Heritage
469-258-4770
* This article applies to Texas real estate and may not be applicable in all states.