Negotiating with Purchasers About Home Repairs

If you are selling your home and have gotten an offer, you may concerned about the prospective buyers asking you to make costly repairs that potentially could cut into your profit.  Repair requests can be negotiated under most circumstances, but it’s important to recognize that your ability to negotiate depends on the contract proposed by your buyers. You and your listing agent need to carefully read and understand the implications of that contract.

Home Sale Contract Options

Standard real estate contracts vary by location, but all of them are completely negotiable.  As a seller, you should never sign a contract until you fully understand its obligations, particularly where it concerns your responsibility for repairs. The best contract for a seller would be for the buyer to agree to purchase your home “as is” or to request an “information only” home inspection, thus absolving you of any need to pay for any repairs.  In most cases, though, your contract will include a clause that says the purchase is contingent upon a home inspection. Some contracts will expressly state that the buyers cannot request any cosmetic repairs to be made and can only ask for fixes to structural defects, building code violations or safety issues. State laws may also impact your liability as a seller for any issues uncovered during an inspection, so it’s important that your REALTOR® understands these regulations. If you are uncertain about the contract, you can also consult a real estate attorney.

Market Conditions

While buyers are always advised to have a home inspection so they know what they are buying, when there are a limited number of homes for sale and buyers need to compete for homes, they are more likely to waive their right to ask a seller to make repairs. In a buyers’ market, though, sellers may find that buyers are more aggressive in asking for work to be done on the home.

Repair Negotiations

Your ability to negotiate depends on the way your contract has been written. In most cases you don’t have to agree to make cosmetic repairs. If a home inspection finds other problems, though, you are typically better off making repairs rather than having the buyers walk away from the transaction. For one thing, the next home inspection is likely to find the same problems so you may not be able to sell your home without fixing the issue. Most contracts stipulate that the home inspector will provide a free copy of the report to the sellers as well as to the buyers. If you receive a copy of the report and it describes defects in your home, you’ll need to disclose those defects to the next prospective buyers. Before you jump into negotiating requested repairs with the buyers and their agent, you should discuss the home inspection report with your REALTOR®. You can get bids from several contractors to find out how much a repair will cost and then decide what to offer the buyers.  Some buyers prefer to request a credit at the closing to pay for repairs that they will handle themselves after the settlement, rather than have the sellers make the repairs beforehand. Another option to consider is to offer to pay for a home warranty for the buyers that will cover future issues with the home’s systems and appliances. However, a warranty only covers features that are working, so if you have a broken water heater, you will probably have to pay to have it fixed before your transaction can be completed.

Whether you get a minor or major repair request, rely on the professional advice from your REALTOR® or real estate attorney to help you handle the issue.