Real Estate Blog - Home Inspections -- Where Do You Draw the Line on Repair Requests?

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Home Inspections -- Where Do You Draw the Line on Repair Requests?

Much of what I advise home buyers depends on the price and terms under which they purchased a home. Not every aspect of real estate has a cookie-cutter answer. If you're buying an REO, for example, only an extreme health and safety code violation will generally persuade a lender to agree to a Request for Repair and, even then, odds are the answer might be "no."

If you're buying a home way under market value, again, a seller might say "no."

If you're buying a short sale home, the answer is almost invariably "no."

But if you're buying a home from an individual seller who is not in foreclosure nor a short sale situation, the answer should be yes, depending on the repairs requested. Most of the time, a buyer is better off asking for a cash credit toward closing costs than letting sellers perform repairs. The seller has no vested interest in the property at that point.

But where do you draw the line? Submitting a laundry list covering every fix-or-repair item on a home inspection is ridiculous. Homes aren't in perfect condition, even new homes, and nobody in her or his right mind should expect them to be.

On the other hand, I had buyers who beat out 20-some offers for a home by paying a mere $1,000 extra, and they got a $5,000 credit toward closing costs for minor items. It's all in the negotiation.

Photo: Calyn Wright, used with permission

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Elizabeth Weintraub is an author, home buying columnist for The New York Times-owned About.com, a Land Park resident, and a Land Park real estate agent who specializes in older, classic homes in Land Park, Curtis Park, Midtown and East Sacramento. Weintraub is also a Sacramento Short Sale agent who lists and successfully sells short sales throughout Sacramento. Call Elizabeth Weintraub at 916.233.6759. Put 35 years of real estate experience to work for you. DRE License # 00697006.

The Short Sale Savior, by Elizabeth Weintraub, available through bookstores everywhere and at Amazon.com.

Photo: Unless otherwise noted in this blog, the photo is copyrighted by Big Stock Photo and used with permission.

Posted by Elizabeth Weintraub, Sacramento Short Sale Agent, 916.233.6759, Lyon RE on 07/25/2008 06:47 PM

Comments (15)

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Originally posted at: Elizabeth Weintraub • Sacramento Short Sale Agent • Land Park: Home Inspections -- Where Do You Draw the Line on Repair Requests?

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15 Comments on Home Inspections -- Where Do You Draw the Line on Repair Requests?

JUL

2008

Elizabeth, I am so on board with this category as well, and just say everything is negotiable. Sellers do not like buyers to be nit picky with inspections but just reasonable.

Just a thought but shouldn't the "you" in where do you draw the line be "they". We are locators, negotiators, and factilitators...not principals. The buyer can ask all they want and the sellers can either accept or reject. We often put ourselves smack dab in the middle of a mess that could be prevented by simply handing over the list and zipping up our lips.

Thats a hard one and I let my buyers kind of dictate what they want. We sell our houses "as is' with the plumbing, HVAC, electrical having to be in working order. Past that the buyer can ask for anything but the seller is not obligated to repair and the seller is not obligated to buy.

Hi Gary: Yes, there are reasonable requests and unreasonable requests. Plus, it depends on how they are presented to the seller. For example, a seller is unlikely to grant a request for repair nor credit the buyer for it if the item in dispute is something the buyer could easily see when first walking through the home. Sellers will say, "Why didn't you ask for it in the offer?" They feel duped at that point and become irritated

Hi CJ: You should link your name so I can leave a comment on your blog. :) That's part of what makes AR so interesting. We're all different. I find that I can get into bigger messes by handing over a list and zipping my lips, and my buyers agree. It is my job to protect their interests and help guide them to make the right decisions. I am not an order taker. If that was the case, they wouldn't need me at all.

Hi Gene: On my listings, when I see a buyer's agent turn in a request for repair that asks for every little thing on the home inspection report to be repaired, I see an inexperienced agent on the other end who let his or her client get out of control. In negotiations, both parties have to feel like they are giving and taking.

When I wear my buyer's agent hat, I like the seller to feel GOOD about making repairs, and the better the seller feels, the more money or repairs I will get for my clients.

Every situation is different. There is no hard and fast rule for every transaction. It depends on the personalities involved, the seller's motivation, the market temperature and a whole host of other things.

Elizabeth, good point. Depending on who I represent, say buyer: I expect them to be reasonable about some of the nit picky things, but today, most sellers comply. As a seller's representative, I suggest they make all reasonable fixes - note the word, reasonable? It's a tough call. Negotiation has to seem fair to both parties, not just one.;-)

This is a little OT, but I'm seeing MOLD/MILDEW/black stuff in a lot of bank owned homes. Are banks into remediation? (Polling the rest of the country here). I don't even know if a bank would a lend on a home with black stuff waving its big stinky smell in the basement. I'm way OT, but Elizabeth, you are a wealth of info with your experience in both real estate and writing!

JUL

2008

Elizabeth, when buyers present a laundry list of items to the sellers for repairs, it will surely 'irritate' the sellers. As you've stated above, the seller would say why didn't the buyers ask for it in the 1st place. The best thing to do is for agents to step in and make sure compromises are taken so both sellers and buyers are happy. That makes for a nice closing.

In determining the repair costs, do you normally get a handyman or contractor to get a bid on the amount of work needed and come up with a figure so that buyers can be credited fairly?

In the particular transaction where your buyers beat out 20-some offers, with that being a multi-counter offer, the seller countered with final & best offer or did the seller state a purchase price on the counter? Nice post.

If I am representing the buyer I remind them that some things are cosmetic and some are structural/functional. If an inspection shows dry rot or termite damage, for instance, I recommend either repair or a credit equal to a valid estimate for correction (unless I feel that it is already priced into the house).

Usually, if they really want the house, cosmetic issues and minor fixes don't stop them.

We try to put "remedies" (for repair items) in our original offer. However, as we all know, inspections may reveal issues that need to be addressed and the buyer has to decide which items are important to them when requesting repairs.

I have had discussions with my buyers regarding items they are requesting the seller to repair. I advise them to make a laundry list of what needs to be repaired and/or update and then have them categorize them by what they would like the seller to take care of and those items that they will take care of once they are in their new home. By doing this they have their own "to do" list... as well as a list of things they would like the seller to remedy.

When we get to the seller's list we than discuss those items that we can classify as "issues" such as leaky pipes, septic systems, etc. (major items). Our final list of "major" items finds its way into the addendum we send to the seller's agent and generally is absent of those "nitpicky" items that tend to annoy sellers.

I agree with the comments above... these items are negotiable and in order to arrive at a "meeting of the minds" on repair isssues it's important to keep lines of communication open. It is, of course, our hope that "reasonableness" will become a part of the negotiations process.

Hi Teri: Sellers are a lot more agreeable to making repairs these days than they were, say, three years ago. Back then it was "take it or leave it." The power has come back to the buyers.

Hi Natalie: The banks here are attacking mold problems, and we have remediation crews who go out and clean up everything. But it depends on the transaction and price, of course.

Hi Jim: I suggest the buyers get bids for the work, and then I submit the highest bid with the Request for Repair. It gives the request more weight. Plus, if the seller were to reject the request, the seller would then be liable for submitting the home inspection and estimate to the next home buyer. So that's an added incentive.

Hi Mike: I generally hold off on the Request for Repair until the termite inspection has been received. Sometimes the pest companies catch everything and sometimes they don't.

Hi Jon: Every buyer is different. I've been astonished at times at what buyers will choose to request. They might overlook a gaping hold in the roof for example, but make a big deal out of replacing a receptacle that is reversed. Hello? $1,500 vs. 50 cents? That's where guidance comes in.

Hi Elizabeth,

I try to have my buyers be reasonable. If something comes up in the inspection that wasn't obvious I will usually try to have the seller fix it. If I have the seller, I try to keep the deal together and give in on a lot of the cheap easy fixes and sometimes throw in something that might have been excluded as part of the sale. (Exclude the Washer/dryer from the listing and throw it in during the negotiations)

All the best!

Kevin

Hi Kevin: I once had a buyer ask for the seller to get up on the roof and remove an empty can. The seller lived 100 miles away. Oh, and she wanted the seller to spray two cans of ant spray around the house. Not that she saw any ants, mind you. LOL.

Elizabeth, I've had clients who have totally embarrassed me with their requests. Most of the time, they are pretty reasonable. But when they are paying top dollar (which is usually the case here) and surprises come up, I think the sellers need to deal with it. And you're right, reasonable depends on the terms of the sale and the sellers' circumstances.

JUL

2008

Hi Patricia: We all get the unreasonable buyers sometimes when, no matter what we say, they insist the seller do something totally out of line such as tear out the driveway and replace it. :)

But I've also had buyer's agents say things to me like "OK, I realize this list contains 37 items to repair, but only these 3 items are my buyer's hot buttons." Blows me away that they would compromise their buyer's negotiating power in this manner, not to mention, break the law. But, it made me glad I represent the seller.

I've seen Home Inspection demands and compliances run the gamut. I think a lot depends on what kind of market we are in. If there are few houses on the market (definitely not now), then the seller can be a little more hard-nosed in their negotiation on repair requests. However, in the current market, we see a great many REO properties, or short-sales. Banks tend to draw a line in the sand on repair requests, even though a large number of houses are currently on the market.

In a more balanced market, the rule of thumb seems to be to fix items that are safety issues, or major systems issues (HVAC, electrical, plumbing, etc.).

As you say - everything becomes negotiable when dealing with the Home Inspection realm.

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