By the time you and your Realtor select a property and sit down to write the sales contract, your Realtor has probably been pointing out some areas of caution, such as wood rot or a hot water heater that needs to be raised.
In the sales contract, we ask for a dollar amount for repairs, replacement or treatment for which the Seller will be responsible. This is the amount the Seller will obligate himself to pay and must be prepared to spend. However, if you agree that the Seller will be responsible for $1000 in repairs, but only $200 is spent, the Buyer does not receive the $800 that was not spent.
So, you want to be fairly accurate in the amount requested when you make an offer. Experienced Realtors can notice many things clearly visible while viewing a home. There are things that will come up during inspections that we could not possibly have foreseen or anticipated. Not every crack indicates structural damage and we have no way of knowing if there is water standing in the crawl space.
If I know that the hot water heater needs to be raised in order to be compliant, I will request that in the contract in the "Additional Provision" section, so that expense is not included in the repair amount.
If the Buyer and the Seller agree that $600 is the repair cap, and the repair estimates reach $1,000, there are several ways to resolve this. The Buyer can elect to make repairs not required by the Lender at a later date, for example. Or the Buyer and Seller may elect to split the $400 excess and make all the requested repairs. Good Realtors will negotiate together to reach a win-win situation for both Buyer and Seller. At this point, the Buyer has already spent money on inspections and an appraisal, and the Seller has taken his home off the market for several weeks - don't let a small amount in repairs kill the deal at this point - there's always a solution!
Comments(4)