You have prepared your house for the market as best as you can. You priced it accordingly and now have your property under agreement.
You are nervously awaiting the home inspection results from the buyer.
But you find the buyer has a long list of repairs after their home inspection. You are wondering what to do when your buyer requests home inspection repairs.
Are the home inspection repair requests unreasonable, are any repairs mandatory after the home inspection, should you do all the repairs, should yout tell the buyer no?
As a seller, you find that maybe a couple of the inspection requests are reasonable and some of the home inspection requests are unreasonable.
How do you handle reasonable repair requests and how do you handle unreasonable repair requests?
Prevent Buyers From Requesting Repairs After A Home Inspection
The best defense is a good offense.
When you are preparing your home for the market go through your home with a fine-tooth comb and take care of a lot of the nuisance repairs that you find. Minor plumbing leaks, peeling paint, any electrical issues, etc… can be taken care of prior to listing your home and hopefully they are minot repairs you can do yourself.
Consider having a pre-listing inspection. A pre-listing home inspection will help pull together punch list items to prepare your home for the market and give you an overview of what a buyer’s home inspector will be looking for during an inspection. If you have taken care of a lot of the issues it can become a marketing tool as well.
You can provide the pre-listing inspection and call out all the little items that were fixed. And, if not fixed at least a home buyer is aware of the issues as well and should make their offer being aware of the issues.
Filling out your Sellers Statement of Property Condition in detail will help prevent issues from a home inspection. The Sellers Statement is a multi-page document where a seller discloses details about the home.
While Massachusetts is a “Buyer Beware” state and does not require a seller to disclose anything unless asked, a home buyer who is fully informed about your home should take any defects into effect upfront, prior to an offer if a home seller takes the time to fill out the disclosure.
It is very hard for a home buyer to ask for a repair after a home inspection if the issue was known to them prior to putting in an offer. It is important to have the disclosure in the buyer’s hand before they submit an offer. And, your listing agents should require the disclosure form is reviewed and signed along with the offer.
What Fixes Are Mandatory After A Home Inspection?
There are no mandatory fixes after a home inspection. You and the homebuyer have already agreed to a purchase price and while the contract has a home inspection contingency in their contract it does not mean that a home seller has to perform any requested repairs after the inspection.
A home inspector may call out items that are out of code with the local building department. That still does no mean you are required to fix it. A new home can “be out of code” shortly after being built as building codes change. But as a seller you are not obligated to bring your home completely up to code.
Most inspection contingencies give the right for a buyer to terminate a contract with no further recourse if they find defects in a home that are unsatisfactory. But in no way is a seller obligated to make any mandatory repairs after a home inspection.
In reality, many buyers may use this clause to negotiate a new price or to have the seller make fixes. And, in rare cases, a buyer may completely pull out of the deal if there are serious issues in the home that they were not expecting.
How to Negotiate After A Buyer Requests Home Inspection Repairs
Your personal circumstances, the state of the real estate market and the seriousness of the repair will factor into how you negotiate after a buyer requests a price reduction or repairs prior to closing. There is no right or wrong.
Some things to consider:
- The seriousness of the requested repair. Mold, water penetration, faulty electrical, major structural issues etc… are all issues you may want to consider taking on.
- What will happen if your home goes back on the market due to inspection issues. In a buyer’s market, having to put your home back on the market because of expensive or serious issues can kill a future sale and will the repair or repairs likely cause a price reduction.
Reject Any Counter Offers of Inspection Repairs
Of course as a seller it is well with-in your right to deny any repair requests. Especially if the requests are unreasonable. Don’t be penny wise and pound foolish though. It is probably not prudent to kill a deal over a few hundred dollars worth of repairs unless it is a strong seller’s market.
While you do not want a home buyer to take advantage of a situation, there is always some hesitation from buyers with a house that has come back on the market due to home inspection issues. A house will become highly suspect if a deal fell through and comes back on the market. The first question from a home buyer is what showed up on the home inspection.
Remember as a seller if you are asked about previous home inspections and to describe the issues you do have to answer the request truthfully. If there are truly serious issues that should be taken care of, most likely these same issues will continue to rear their ugly head with each new buyer during a home inspection.
A real estate agent is under obligation to disclose any known issues with a house even if the seller doesn’t. You can’t hide a serious issue with your home.
It is well within your right as a home seller to reject home inspection repair requests. But, make sure you have thought it through carefully whole consulting with your listing agent.
Negotiate Home Inspection Repairs
Often a home buyer will ask for specific repairs to be performed by the home seller by closing. You can certainly negotiate what repairs you are willing or not willing to do. While doing the repairs can be burdensome on a home seller who is also trying to pack up and move, I find this more cost-effective than negotiating a price reduction for repairs.
In my experience a buyer will way overestimate the cost of a repair when a home seller can have the repair work done for much less than the buyer is requesting.
A buyer’s head is usually spinning after a home inspection with a long list of punch list items. They are like Chicken Little running around screaming the sky is falling. When in reality many of the issues are minor and can be rectified quite simply.
Negotiate A Price Reduction
If trying to pull together home repairs prior to closing seems like a daunting task consider paying all or some of the buyers closing costs or a price reduction to compensate for the future repairs that a home buyer will have to do.
The plus of a price reduction is it does eliminate the stress of getting the repairs done yourself. The downside is it can be tougher to come to terms with the price. A buyer will always way overestimate the cost of repairs.
Or, you can handle the after home inspection negotiations both ways. You can choose to handle some repairs yourself and offer a price reduction or closing cost credit for others. Nothing is set in stone.
A Word On Closing Cost Credit
One concern from buyers is if you negotiate the buyer are to do the repair themselves and you reduce the price of the home, where does the extra money come from.
Are My Buyer’s Making Unreasonable Repair Requests?
So what repairs should a home seller consider doing?
When your home buyer requests home inspection repairs take the time to review carefully.
Do not immediately become defensive and think they are making unreasonable repair requests. Maybe they are, maybe they aren’t, but don’t let emotions overtake you without carefully consider what requests your home buyer is making after the home inspection
Make sure you have a clear understanding of what the buyer is asking for after their home inspection. They should provide evidence of the issue by providing the particular section of the home inspection report spelling out the issue.
Now, this is where you really have to pay attention to what is reasonable for your price range and the type of market you are in, and even where you are located in the country.
Take two similar houses where one is selling for $350k and the other is selling for $500k. The expectation of condition would be different. You would expect the house for $350k would need far more work than the one selling for $500k This is where your real estate agent really can counsel you based on what they are seeing in the marketplace.
Review with your listing agent what inspection requests are reasonable and you might consider doing (if any) and what buyer repair requests are unreasonable.
Unless otherwise stated by the seller in the sellers disclosure a buyer expects (and reasonably so) a home to be relatively safe, healthy and functioning properly at the time of the sale.
Consider The Current State of The Real Estate Market
You need to consider the current market conditions first. The market is very different today in 2021 vs the market in 2010. Today the market is on fire, buyers are fighting fiercely for good homes. But, in 2010 a seller could barely give a house away.
How you handle repair requests can be very different based on market conditions. Today,you can pretty much tell a buyer next, please, if they dare ask for any requests at all. There is most likely another buyer right behind them willing to accept your house as-is.
In 2010, you had to consider every repair request seriously even if the request was unreasonable. If you said no, you could easily turn the buyer away and not know if you would even get another offer.
The Difference Between A Buyer’s Unreasonable Repair Request and A Reasonable Repair Request
Serious issues may arise a seller is not aware of at all during the inspection of a home. A seller can live for years with excessive amounts of mold in their attic or high levels of radon in the home and not even know it.
Both of these do pose a health risk to potential occupants. These are requests that a seller should consider making.
An electric panel that has had water penetration and corrosion is a fire hazard and should be rectified by an electrician and a home seller should probably consider the repair or a credit back at closing. A home buyer has put in an offer expecting the panel to function properly and safely.
But a 100 amp panel that may be maxed out but fully serviceable, is not necessarily a repair request a seller should consider. There is no safety issues and it is fully functionable.
A furnace that is functioning properly but is past its useful life is another story. As far as I am concerned you are delivering a home with a functioning furnace and in good repair, even if it is older is not an issue. The current furnace could die next month or last another 10 years but it is functioning properly at this current time.
Now if the furnace has a cracked heat exchanger that again is a safety issue. It could leak dangerous carbon monoxide into the home.
An outside outlet that is not GFCI or insulation in the attic that is not to code are not what I would call serious issues and should be reviewed on a case by case basis.
At some point, the buyer needs to realize that they are buying a used house. Not everything will be to current building codes and there are some dings and dents.
Do Your Due Diligence
You have a list of items you might consider either compensating a buyer for or are willing to repair. Do your due diligence and call some contractors that are appropriate for the job.
It is much easier to negotiate from a position of knowledge than one of uncertainty.
For example, I recently had a buyer who wanted $2000.00 off for a pest treatment for mice. The buyer was supposedly quoted that price by a pest company. I jumped on the phone, called a few pest companies I knew. I received a quote under $400 with a 6-month guarantee. There is a huge difference there.
Remember a home inspector knows a little about a lot of things but is an expert in none.
Often times a question of concern from a home inspection can be made to go away by a quick, inexpensive appointment with the appropriate specialist. If a licensed electrician, plumber or other professional put their stamp of approval on something being in proper working order it is very difficult for a home buyer to dispute that.
Negotiating Home Inspection Repairs
If your home buyer is being unreasonable with their home inspection repair request, present what you are willing to do and not do when it comes to repairs or price adjustments. Definitely keep emotion out of the negotiations.
Many buyers will come with a long list hoping to negotiate somewhere in the middle. Get the negotiations started. If the buyer is asking for a lot and your not willing to do much, give a little see what happens. I have closed the gap many times on situations that seem impossible between a buyer and seller as a listing agent.
As real estate agents we spend part of every day negotiating and your listing agent can be invaluable. If you and your agent have done your homework about the market costs of repairs and have a good understanding of how your house compares condition wise to other houses in it’s price range, calmly present your case to the buyer and know whey you are just willing to walk away and move on to another buyer.
More often than not terms can be agreed upon that both parties can live with.
What To Do If Your Buyers Are Asking For Unreasonable Repairs After The Inspection
You can’t stop your buyers from asking for unreasonable repairs. I have seen buyers that want every little picky item repaired. It happens.
Remain calm and talk with your agent about what repairs you should or shouldn’t do based on the current real estate market conditions and your home’s competition. Remember everything is a negotiation. Some buyers are going to ask just to see what they can get from you. Others may truly expect perfection.
If your buyer is truly unreasonable with their repair requests be prepared to shut down negotiations and walk away.
Final Thoughts On Home Inspection Repair Requests
There is no right or wrong way to handle your buyer’s request for home inspection repairs after the fact. What are reaonable and unreasonable repair request canbe very subjective. As the seller, you need to decide what repairs you may consider taking on and which are deal breakers for youbased on many different factors.
Taking the time upfront and considering a pre-listing inspection, consider doing any nuisance repairs, if you have the money do any major repairs that will make buyers hesitate in making a great offer, and a prepare a detailed sellers disclosure can prevent a lot of nuisance requests from surfacing int the first place.
There are pros and cons to handling it each way and one may be better for you than another. Look to your agent to see what is a reasonable request and what is not based on the price bracket your home falls in and the current market conditions.
Everything is negotiable. Just because a buyer asks that doesn’t mean that they will walk away if you do not give them everything they want. If you are reasonable in what you are prepared to do hopefully the buyer will reciprocate in kind.
Do your due diligence and don’t become defensive. A few small repairs for a few hundred bucks can be a lot easier than killing the deal and putting your home back on the market after wasting valuable time under agreement. Remember a bird in the hand is worth two in the bush!!
At the end of the day, consider… is it worth walking away over a few hundred or maybe thousands of dollars and try to capture the interest of another buyer?
Other Home Inspection Resources:
- Joe Manuasa 5 Tips for Sellers Regarding Home Inspections
- Anita Clark Should a Seller Get A Home Inspection Before Listing Their Home
- Paul Sian Top 8 Home Inspection Issues
- Bankrate Who Repairs? Buyer or Seller?