How Buyers and Sellers Should Approach Repairs During a Home Sale

Buyer’s Request for Repairs

You finally found the home to buy, are in escrow, and have completed your home inspection. The home inspection lists pages of items which may need repair and/or replacement. So now what?

As a buyer you may want to send the entire home inspection report to the seller and request that the seller fix everything. But before you do that, remember the following:

1. Houses in California are sold in “as-is” condition. That means that the buyer takes the property in the condition that it is in when the buyer makes the offer to purchase. A seller is under no obligation to fix anything (or technically even respond to your request), nor are repairs a contingency under the contract.

2. Home inspectors point out all the flaws in the property, some of which are an inexpensive quick fix or are just old and may require fixing in the future.

3. Most sellers are living in the home and aren’t bothered by some of the minor issues brought out in the home inspection report. They may be insulted by a large repair request, causing them to refuse to do any repairs.

So what do you do? Look carefully at the home inspection. Identify those items which are deal breakers for you. For example, if the kitchen faucet is old and drips but there is a hole in the roof, request that the roof be repaired, vs. the faucet. Keep your repair requests reasonable. That should not overwhelm the seller who will be more likely to agree to some if not all of your requests.

Real estate agents will often suggest requesting a lump sum of money as a credit instead of asking for a list of repairs. You get to oversee your own repairs instead of relying on someone who is about to vacate the home to repair them, and you may be able to stretch the repair dollars further. It is just an option to consider.

Remember, you are buying a home that is “used.” You should expect that there will be flaws. Make sure that you are aware of those flaws and can live with them.

Seller’s Response to Request for Repairs

Your family home is in escrow. You are looking forward to closing the sale. The buyer has done a home inspection. The buyer then sends you a copy of the inspection report requesting that you complete all of the recommended repairs.

Before you get angry and refuse to do any repairs, pointing out to your agent that the home was sold in “as-is” condition, take a breath. Look at what the buyer is requesting. While a seller is not obligated to make any repairs for the buyer, and it is not a contingency of the sale, going through the request for repairs is a wise thing to do. Then decide what, if any, repairs you are willing to make. This can help keep the transaction moving forward to close of escrow.

If you as the seller want to make repairs or hire someone to effectuate those repairs, you can. But often times the better route is to provide the buyer with a credit through escrow for those repairs. Why would you want to credit the buyer instead of making repairs? The answer is simple: if you don’t do the repairs or hire someone else to do the repairs, you have minimized your liability for the repairs should they not be completed to the satisfaction of the buyer. The buyer gets a credit for the repairs and takes on all of the responsibility for the repairs.

As the seller, you know your home and have lived with the flaws. But a buyer is not always willing to take on those issues. By keeping an open mind and working with the buyer, you can probably reach a mutually acceptable agreement for repairs — or credit — so that everyone is happy with the home.

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Search Larson & Solecki LLP