Imagine this… You’ve just gone through the process of finding a home, and you are finally satisfied with your decision. You get a really thorough home inspection, and your inspector uncovers a couple of issues that don’t worry you, but there are a few problems with the home that have you concerned. This isn’t astonishing, as the average home inspection turns up around $11,000 worth of potential repairs. At this point, you typically have a couple of options:
- Negotiate for cash or reduced price on the purchase of the home and complete the repairs after closing
- Ask for the repairs to be done as an element of the contract for purchase
So which route do you take? The solution may surprise you!
Negotiate for cash or price reduction
Often the seller has deadlines for selling their house and moving on to a new one, so completing the repairs themselves may not be plausible. In this instance, you can negotiate the price of the house down or request cash at closing to cover the repairs. While this may speed up the process of getting into your new home, you are leaving yourself open for a couple of common issues with home repair. The most problematic is uncovered repair costs.
For example, you find some water damage in the form of buckled floorboards. The seller tells you that they have several replacement floorboards in storage that they will provide, and that it should be fairly simple to have those replaced and sanded/stained to match the current flooring. They provide you with $1,000 in closing costs to have that repair completed.
You happily move in and hire a local professional to complete the repair, who finds water damage in the flooring beneath the boards. The walls around a nearby window also appear to have experienced some moisture damage post-inspection and mold is present. Your $1,000 is gone in a heartbeat, and now you have a much larger water damage issue – and you have to spend your own money to complete the repair. At this point, you find yourself wishing you’d had the sellers deal with these issues before closing.
Ask for repairs to be completed before closing
According to a recent Zillow Consumer Housing Trends Report, 36% of homebuyers have the seller make repairs before the real estate transaction is finalized. This sounds like a great idea. The issues you were worried about from your inspection report are getting fixed. Your hope here is that the seller will hire a reputable professional and follow the same process you would. Then it is likely the problem will be resolved, and you can move in confidently knowing the seller made morally-just decisions and solved all problems. While we hope that is how it goes, often in these cases the sellers hire a low cost handyman to remove and replace the boards for around $1,000 – the amount you were originally going to get, but they disregard all other potential issues in order to satisfy the negotiated repairs.
In this case, you could move in without knowing you are developing a mold and floor stability issue.
No one answer works better than the rest. Every situation is unique and has potential upsides and pitfalls. Here are some of the main resources and considerations when moving into any home:
- Are you in a hurry to move, and is your timing urgent (meaning you may have to take on repairs yourself)?
- Can you handle a financial hit from repairs, especially surprise repairs?
- Make sure you fully understand the implications of your inspection. Your home inspector should be happy to explain any of his or her findings to you.
- Understand coverage from your homeowners insurance.
- Choose a home warranty that can cover some of the issues that may arise.
- If repairs are completed by the seller, have a re-inspection to ensure quality work.
Make reasonable repair requests
Your soon-to-be home may seem perfect to you, but nothing is ever free from defects. You may find yourself wondering what repairs you might expect the seller to cover. Chances are that they’ll take care of either making or funding certain repairs… as long as your requests are within reason. But what exactly constitutes a justifiable request?
Here are some things you can reasonably ask the seller to address (unless you’re buying the home “as is”):
- Significant electrical issues, especially when these concern safety and/or code violations
- Roofs that leak or are missing shingles
- Water damage and mold
- Damage from pests, including termites
- Plumbing, sewer, septic, drainage, or water problems
- Building code violations
- Certain HVAC issues that have an impact on your comfort in the home
- Presence of asbestos
- Presence of lead paint
- Radon levels above 4 pci/L
It’s best to refrain from asking the seller to take care of the following:
- Repairs priced at less than $100 each
- Purely cosmetic issues
- Minor electrical problems
- Minor water damage or leaks
- Cracks in the basement that do not have structural repercussions
- Nonessential landscaping
- Anything you can fix yourself with the items in your toolbox
If you’re fortunate enough to move into a home and have zero surprises, HUZZAH! If you find yourself on the other side of the fence, however, research your options and coverages to help you make the best decision. In the end, a good inspection/inspector, supportive homeowners insurance/agent, and reliable repair professionals will be there to help you live happy and healthy.
Need a home inspection? Reach out to the professionals at HomeGauge.