My New Outside Blog: Jumping Over the Home Repair Hurdle

Jumping Over the Home Repair Hurdle

 

We are about to approach one of the most painful parts of the purchase transaction ... the home inspection and Amendment to the Contract for repairs.

This hurdle is not only one of emotion for the sellers and buyers but is also one of the lawyers' personal favorites for legal battles.

It begins with the property inspection.  Items cited as deficient.  The amendment to do certain repairs is presented to the seller.  Then the fireworks begin!  The seller has just never seen a more outrageous report, how picky can an inspector be, just ridiculous!  We have heard this outcry many times over.

Overcoming this the seller's emotion is the first step a listing agent must address before any reasonable discussion for the amendment can be considered.  Statements such as - the inspector has a responsibility to point out all items, even those that were in code at the time the home was built but are no longer found acceptable.  Yes, new code requirements are to be cited, the consumer should know about new discoveries for safety, etc.  We want the inspector to find all the flaws so that these findings really protect you down the road.  To know now is better than find out later and then possibly receiving unhappy buyer calls or worse an unpleasant lawsuit!

Now the fun begins - what will the seller elect to correct or negotiate and what items will they decline?  This phase of the negotiations can be sensitive but once all is agreed the next decision on how to handle these repairs is critical.

Do you obtain bids and offer money compensation for repairs or does the seller take ownership of having all repairs made?

How this hurdle is approached and jumped is key.  Opinions as to what is best vary.

Buyer to do the repairs with money compensated:

  • Time consuming, may delay their move in.
  • What if the repair reveals more issues that need repair and cost are driven up?
  • Who obtained the repair costs .. were the best professionals used to obtain bids or Joe the I just got into the business of handyman?
  • Control of quality of work and can hold the vendor responsible.

Sellers responsible for the repairs:

  • Buyers may not like how the work was completed, may think is sloppy.
  • Not enough time to complete the work and now the negotiation of how to handle this situation.
  • Inconvenience of trying to pack, may be already moved and now must oversee repairs (well we all know the listing agent will step up for this).
  • Liability of work done properly and it malfunctions soon after close. 

There are split opinions on how the repairs are to be made and arguments pro and con on how to handle.  This decision is up to the seller & buyer to negotiate and come to an agreement.  If the seller does the repairs then the buyer should be furnished receipts for the work, have required professionals and licensed service companies handle.  A walk through inspection by the buyer prior to close should be made to validate the repairs acceptability and even another trip of the home inspector to verify all is proper.

What is the best way to tackle this hurdle of who does the repairs?

Comment balloon 15 commentsConnie Goodrich • March 18 2011 08:42AM

Comments

Connie,

This is a hurdle! I do not consider my homes sold until this task is complete and behind us.  One of our main issues is radon.  We live in a very rocky area and I would say 7 out of 10 houses come back with high levels of radon which is a $1000-$1500. expense. 

We no longer have a place on our contracts that determine who pays or the amount allotted for repairs.  It really is a complete re-negotiation once the inspection takes place. 

It's a sticky task, but a necessary one.  Nice post, I'm suggesting for feature.

Posted by Cindy Edwards, CRS, GRI, PMN - Northeast Tennessee - 423-677-6677 (RE/MAX Checkmate) over 8 years ago

Inspections are deal killers MORE than attorneys getting involved and there is good reason. A seller has a limit for what they will repair, the buyer has satisfaction and a dealbreaker attitude. If you can get PAST inspections with both sides you are past one of the biggest bumps in the road.

Posted by Gary Woltal, Assoc. Broker Realtor SFR Dallas Ft. Worth (Keller Williams Realty) over 8 years ago

Hi Connie,  My business partner, Belinda, just wrote a post this morning about home inspections.  She compares them to going to the dentist for a root canal.  Have a great day.

Posted by Will Hamm, "Where There's a Will, There's a Way!" (Hamm Homes) over 8 years ago

I agree with Cindy too....Everyone holds their breath until the inspection phase is over and agreed upon...

Posted by Kristin Johnston - REALTOR®, Giving Back With Each Home Sold! (RE/MAX Realty Center ) over 8 years ago

I have also experienced it as to how much the buyer wants the house absent of any serious defects. Inspections can be snarly or similiar to Will's suggestion in #3.

Posted by Teral McDowell (Referral Patners LLC) over 8 years ago

Connie,

Cherise handles these on an individual basis.  However, savvy negotiations about financial considerations of inspection items seems more common.  The really serious problems occur with the bank-owned properties, which you know, is usually "as-is."  g

Posted by Cherise Selley, Colorado Springs Realtor (Selley Group Real Estate, LLC) over 8 years ago

Good morning Connie,

Getting through the repair issues is many times the toughest negotiation in the transaction. As a listing agent it is important to have good vendors who will give accurate estimates and follow up with repairs done by a professional and able to withstand a re-inspection. It's always easier to agree on a dollar amount but there are some buyers who just want the work done..you have to have the connections to make that happen!

Posted by Dorie Dillard CRS GRI ABR, Serving Buyers & Sellers in NW Austin Real Estate (Coldwell Banker United Realtors® ~ 512.750.6899) over 8 years ago

Connie - it will be interesting when it comes time to sell our own home my hubby says there will be no re-negotiations after the initial ones our home will be sold WSIWYG no SPIS no warranty's no adjustments nothing. He says the buyer needs to do their own due dilligence before they make an offer not after. That is the way he looked at every home we ever purchased once the deal was struck it was a deal not the starting point for more negotations.

Posted by Kathy Clulow, Trusted For Experience - Respected For Results (RE/MAX All-Stars Realty Inc. Brokerage) over 8 years ago

I have found that there is no such thing as selling a house "as is". If a seller says as is then I see no problem making it clear to the buyer that that is the way it is and no exceptions BUT that certainly is not the case when it comes to a VA appraisal. VA loans are the norm/majority here as we are in a military community with the Minot Air Force Base just a few miles away. If a VA appraiser says it has to be fixed then it has to be fixed and the work needs to be done before COE. In this case even a stubborn "as is" seller must make repairs or look for another buyer. With most buyers here being VA he/she may have a long wait for a qualified buyer. Also note that due to the great prosperity of our Stae foreclosures are extremely rare so they seldom end up being part of the situation.

Posted by Bob "RealMan" Timm, Owner of Ward Co. Notary Services, retired Realtor (Ward County Notary Services) over 8 years ago

Connie, I agree that getting past the inspection and agreeing to the repairs is one of the toughest issues in many cases.  Inspections are obligated to "call out" everything they find and sometimes this is a problem. 

I love it when the inspectors do call out every thing but do not act like it should be a deal killer.  There are some great inspectors in this area who calmly go over the details providing the facts.  One of my listings just went under contract and we are having the inspection in a couple of days.  I try to educate the sellers from start of listing and again when we go to contract.  Excellent post!

Posted by Barbara Hensley, Homes for Sale in Rockwall County, Texas (RE/MAX Properties) over 8 years ago

HI CONNIE!  I suggested this because it is a great topic - especially because so often people will let emotions get in the way of being rational.  Home inspections - you said it all!I tend to prepare my Sellers ahead of time by saying, "The inspection is going to rip apart your home and it will feel like someone is personally attacking you and criticizing all the effort and care you've put into it. Prepare to put your emotions aside and focus on two things - the big picture - and peace of mind that you may be able to give the next owners an even better home than they have already."

Posted by Gabrielle Kamahele Rhind, Broker/Owner (KGC Properties LLC, Tucson Property Management & Real Estate) over 8 years ago

I love fireworks. From right here on my back patio I can see SeaWorld’s nightly fireworks during the summer, as well as about seven July 4th and New Year’s Day fireworks. Good luck with your version of fireworks, though. JJJJ

Posted by Not a real person over 8 years ago

I hope you guys know you can sidestep all the fireworks with a pre-listing sellers inspection? I mean you must have heard of them, right. If not then contact me right away. (Or somebody like me in you area.)

I hate going to the dentist and having my work likened to a root canal is ... well....painful. I'm not out to wreak anybody's deal. Calm is my middle name! There is always an informative but gentile easy way to present the facts. Panic serves no-one.

So if you're working with an emotional, nervous or proud owner, getting a pre-listing inspection will head off all the worry and angst later. Should an issue be found then decisions can be made about it without deadline pressures. Solutions can always be found, even just declaring it to potential buyers before offers are received. This is very practical for owners who can not or don't wish to spend money now.

Posted by Robert Butler, Montreal Home Inspector | Aspect Inspection (Aspect Inspection) over 8 years ago

I usually do just as you have done and point out to my Client the pros and cons of the different ways to handle the situation. Then I let them decide.

I like this post so I'm suggesting and reblogging.

Posted by Jim Frimmer, Realtor & CDPE, Mission Valley specialist (HomeSmart Realty West) over 8 years ago

I think that the process of inspections is where we as agents really earn the respect of our clients. I personally enjoy the process.

your friend on Charlottesville

Posted by Charles McDonald, REALTOR®, Blogger, Principal Broker®, Owner (Charlottesville Real Estate Solutions) over 8 years ago

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