Who Pays For Repairs Once An Inspection Has Identified Issues?

Once the Buyer and Seller agree to a contract, one of the first things the Buyer will do is order the inspection.  It is very rare (in fact, almost unheard of) for a home (even a new construction home) to get a perfect inspection.  So who should pay for repairs, the buyer or seller?

From the Seller's point of view, they may have lived in the home for many years without any problems.  All of a sudden they are presented with an extensive list of items discovered by the inspector suggesting repairs.  How will they react? 

We prepare Sellers beforehand not to be discouraged and not to panic when the inspection comes back.  It is normally accompanied by a request for repairs from the buyer.  At this point in time, we remind the Sellers that they are not required to make a single repair called out on the inspection report.  That is why the amendment is commonly referred to as a "request for repairs".  Although the seller is not required to make any repairs, the buyer also doesn't have to buy the home if they think the seller is being unreasonable. 

I have had instances (although rare) where the Buyer asked the Seller to make every repair called out on the entire inspection report, large and small.  I have always felt that was unreasonable.  I have also had Buyers who made no requests for repairs at all, even though the inspection report called out many.  The Buyers were perfectly happy with the price they negotiated on the home and felt no need to push the Sellers any further.

Sellers tend to lose interest when they are hit with "picky" repairs. In their way of thinking "If the Buyer is looking for a home in mint condition, they should go buy a new home".  Buyers tend to lose interest when the Seller takes a hard line and says they are not going to make any repairs at all.  In either case, once this happens the negotiations can go south pretty quickly and it makes our job much more difficult in bringing the parties together. 

Health and Safety Issues

There is, however, one area of inspections which I have some very strong opinions about.  It has to do with repairs on items that relate to serious health and safety issues.  Those repairs should be made by the Sellers.  It might be a small gas leak, incorrect electrical wiring, an undersized breaker, etc.  Anything an inspector calls out that has the potential to harm a person or damage the property, in my way of thinking, is a no-brainer for the Seller to repair.  Why?

1. The Seller is probably living in the home and will continue to do so until closing.  Why wouldn't they want to make a repair on a hazardous situation once it is pointed out to them?

2. Once a health and safety issue has become identified to the Seller, it is their obligation under the law to pass that knowledge on to any Buyer of their home from that point on.  It doesn't matter if they change Realtors or even if they sell the home by owner.  They still must notify the Buyer of their home of the hazardous situation.  Since the problem isn't going to go away on its own, what is the Seller gaining by not correcting it right then?

3. It is the right thing to do!  Who would want to subject someone else to a hazardous situation in a home they have sold to them?

Seller Repairs Versus adjustments on the sale price

Once repairs have been negotiated between a Buyer and Seller, the next consideration is how are they going to be taken care of?  Should the Seller be responsible for the repairs or should the Seller just discount the sale price to cover the cost of the repairs and let the Buyer handle them?

If the Seller is going to be responsible for the repairs, we always make sure they obtain receipts from licensed professionals for any repairs made that are not at the most simplistic level.  We don't want a "friend of a friend" with minimal electrical knowledge doing critical wiring. 

Many Sellers simply don't have the time to take care of the repairs.  They just cannot schedule and meet plumbers, electricians, carpenters, masons, etc. at the home.  They would rather provide an allowance at closing to cover the cost of the repairs.  Of course, this means the repairs will not be done until after the new owners have taken possession of the home, but there are some real advantages to this.  The burden of doing the repairs correctly is taken off the Seller.  If the Seller made a repair and something went wrong, the Buyer might assume the Seller hired an inferior contractor.  The Buyer is now taking on the responsibility of doing the repairs and they can have them done by the contractor of their choice. 

Tom Grisak Estate Homes Realtors, Inc - Texas License # 0329533

Your Realtors for Allentexas, Fairviewtexas, Lucastexas, McKinneytexas, Murphytexas, Parkertexas, Prospertexas