Repair Request

Repair Request Process

You may have stated “as-is” required in the offer to purchase, nonetheless, offers also typically allow for buyers to inspect the property, review reports and the sellers disclosure packet and cancel the agreement if they are not completely satisfied with what they find, and if your buyer has an agent, get ready to negotiate with a pro.

The request for repair timeline

The typical request for repair timeline looks as follows:

  1. Buyer and seller agree on an offer.
  2. Buyer subsequently has a general home inspection and reviews disclosures as part of buyer’s inspection contingency.
  3. Buyer learns of items in the home that are not up to current code or are not working.
  4. Buyer submits a list of repair items to seller on a request for repair form.
  5. Buyer conveys an implicit or explicit message: “Fix these things or I’m canceling escrow.”
  6. Seller can agree to the fix-it list, counter it or reject it.
  7. If Buyer does not like the answer from seller, buyer can cancel escrow and receive an earnest money refund.

Agreeing to repairs is usually the right move

More often than not, sellers agree to needed repairs. The decision is usually wise because it can be costly for sellers to begin marketing again and find a new buyer. Moreover, in the scheme of the total transaction, the repair list dollar amount is usually relatively small.

The cash alternative to repairs

Note that sometimes the buyer submits a list of things to be repaired. Other times, buyers ask for a cash credit in lieu of repairs.

From the seller perspective, the cash credit is usually preferred to making the repairs if the amount requested is reasonable (or not too unreasonable). The reason this method is preferred is that the seller does not have to deal with the hassle and stress of obtaining repairs during the short-time frame of escrow. For sellers, even if the buyer has requested repairs be done, it can be a smart move to counter the repair list and offer the buyer a cash credit at closing.

Smart sellers minimize or eliminate repair requests

Note that if a seller has not listed yet, has just listed or has yet to receive an offer, a smart move is to complete the sellers disclosure packet and have real estate inspections done prior to entertaining offers. Make buyers review all of the sellers disclosure and reports prior to submitting an offer, and have them factor the disclosures and reports into their offer price.

In this way, the “as is” language in the offer has more teeth. It becomes very difficult from a  moral perspective for the buyer to make repair requests because the buyer knew the condition of the property prior to writing the offer. The cost of repairs were presumably reflected in the offer price.

By having real estate inspections done in advance, the seller can repair items so that they do not arise during the contingency period. For example, if an inspector notes a leaky roof, a wise seller would know that all buyers are going to want the roof fixed, and so will the buyers lender. The seller can have that work done.

By contrast, if an inspector notes that a water heater is nearing the end of its useful life, the seller can simply inform potential buyers to factor this eventual water heater replacement into their offer.

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