Real Estate Agent with Dunnigan, Realtors, Sacramento (916) 425-9715 CalBRE # 01188158

I am teaching a class tonight on how to approach a Request for Repairs.  The wonderful thing about taking on these kinds of endeavors is that it forces the teacher to brush up on the subject.  I read some of my peers opinions as well as some well known websites.  Each one gave some great insight.  However, I thought it might be advantageous to combine them to one person's opinion of all aspects of this challenge.

First and foremost, this is almost all about managing expectations.  For both buyers and sellers, I have my "spiel" fairly well thought out (as well I should after almost 20 years!).  Here is some food for thought:

For sellers, it begins when the listing is taken.  In the conversation of what to expect, there certainly should be a portion of it dedicated to the Request for Repairs.  In summary, mine goes something like this:

     Mr. and Mrs. Seller, after we have an accepted offer, the next most important step will be the buyers inspection and Request for Repairs.  Now, you will note on the contract, the buyers are accepting your home in it's present, physical "as-is" condition.  Having said this, you can assume that you will receive a Request for Repairs.  The reason for this is while the buyer has seen the property, they do not have the expertise nor do they have the opportunity to test the operating systems of the home.  A home inspection not only confirms what buyers have seen, but also what they cannot see - leaks, non-working heat and air systems, leaking roofs, pest infestation, etc.  You can expect a buyer to ask for these types of items to be addressed.  This can be done several ways.  One is to ask for the items to be repaired.  Another would be a credit in escrow towards recurring and non-recurring closing costs.  The buyer can ask for a reduction in the sales price in lieu of repairs.  The seller still has say on what they are willing and not willing to do, so this becomes a negotiating item.  I will guide you through the appropriate repairs and responses.

For buyers, it begins at our first meeting.  In describing the process, I share the portion of purchasing a home which is the professional home inspection.  I share with the buyers the purpose of a home inspection.  Again, the contract says that they are taking the home in its present physical "as is" condition.  However, the home inspection is going to inform them of not only what they can see, but the surprises as well.  Some of those surprises are items that should be addressed in the Request for Repairs.  Most informed sellers will understand this is part of the process and will be expecting the request.  They should also be expecting the same options for a response.

It should be pointed out that all homes have issues - from century-old homes to brand new homes.  For this reason, Requests for Repairs should not be taken personally.  It is important to look at this as "In what condition would you want your home to be in when you take possession?"  If you can put on the shoes of the other party, it is much easier to see their point of view and come to terms you can both live with.

Another aspect of negotiation is the accepted price.  I always inform a seller who received at or over asking price to expect a longer list than one that was well below asking price. The buyer will usually equate the amount of the accepted price with how much "wiggle room" the seller has for repairs.  The caveat to this is if there are back up offers.  In this case, the buyer should be very careful regarding how much work they ask the seller to do.  The seller can always refuse, in which case the buyer has the choice to accept the property "as is" or to move on to another property.

I hope this is of some help for those struggling with this portion of an escrow.  It is challenging for sellers, buyers and their Realtors.  It can also be a great opportunity to build trust and a sense of fairness.



Comments (3)

Norma Toering Broker for Palos Verdes and Beach Cities
Charlemagne International Properties - Rancho Palos Verdes, CA
Palos Verdes Luxury Homes in L.A.

Paula - I'm in the middle of negotiating repair requests on a transaction, and it really is all about managing expectations.  

Jun 10, 2014 10:15 AM
Paula Swayne
Dunnigan, Realtors, Sacramento (916) 425-9715 - Sacramento, CA
Realtor-Land Park, East Sac & Curtis Park -Dunniga

Hi Norma!  I have found it to go so much smoother if I can say "remember when we discussed..."

Jun 10, 2014 10:25 AM
Tom Arstingstall, General Contractor, Dry Rot, Water Damage Sacramento, El Dorado County - (916) 765-5366
Dry Rot and Water Damage Mobile - 916-765-5366 - Placerville, CA
General Contractor, Dry Rot and Water Damage

It sounds like you have been through this a few times over the years Paula. Great description of what to expect.

Jun 10, 2014 11:32 PM