Buyer vs. Seller: Who Pays for Repairs after a Home Inpsection

By, Henry Moore @ FitWellTraveler

So, you have finally found the home of your dreams. You put in an offer, and the seller accepts it. However, before you can proceed, there is the matter of the home inspection. When this inspection comes back with a list of suggested repairs, whose responsibility is it to pay for these problems? Are you entitled to make your seller cover the cost, or is it now on you to make the fixes? Navigating this can be tricky — courtesy of the Marin Real Estate team, here’s all you need to know.

Before the Inspection 

It is worth noting that, since home inspections usually happen after the seller has accepted your offer, it helps to be able to identify potential issues before this, when you are still considering houses. After all, a necessary major renovation could influence how you feel about buying a given house. Things to look out for include:

•       Roof - There are several telltale signs that a roof needs work from a professional contractor, such as signs of curling or wear, fallen shingles, or evidence of leaks.
•       Foundation - Look out for visible indicators of foundation issues, such as large cracks, gaps around windows or doors, doors not closing properly, and sagging floors. 
•       Mold - Mold removal is a costly process, which is something to keep in mind.

Additionally, you may want to consider using software that will help you keep your inspection paperwork organized. For example, you can digitize your paperwork for easy access, as well as to avoid clutter. You can also use online tools to compress a PDF online, allowing you to keep track of your digitized documents in one easy-to-use file. 

Are Sellers Legally Liable for Home Inspection Repairs? 

Generally speaking, sellers are under no legal responsibility to cover the cost of repairs suggested by an inspection. However, as explained by the Balance, it is often in their best interests to do so, especially if there is a chance the buyer will cancel the sale. Having a home to go back on the market can make it lose value and, as a result, make it harder to sell, so it is often easier to just pay for the repairs.

That said, most contracts have something called an inspection contingency (or due diligence contingency), which outlines the conditions under which a buyer can back out of the sale following an inspection. According to Bankrate, some contracts benefit the buyer, and some the seller. For a buyer, a good contract would be one that allows you to present the seller with a list of repair requests which they can either accept or reject. 

Which Repairs to Request? 

Generally speaking, it is reasonable to request sellers to split the cost of any major defects or anything that is a matter of safety. After all, you cannot be expected to move into a house that is not safe or fit to live in. Repairs requests you should avoid making include cosmetic changes, cheap (under $100) repairs, minor water damage, and anything you were planning on changing anyway for your own personal renovations. Of course, as a seller, you are permitted to ask for anything that makes the home more appealing to your family. Keep in mind, however, that the buyer has their interests to look out for as well. The best way to ensure a fair and equitable transaction is to hire an agent with keen negotiating skills.

Negotiating Costs

When you give the seller your requests, you can give them the option to repair the issue before you move in or give you an equivalent cash value. Many buyers prefer the latter because it puts them in control of the quality of the work. If you go down this path, make sure you know how to hire a good contractor by seeking recommendations, getting several references, and making sure you sign a detailed contract. You should also make sure you read plenty of reviews before making a decision on a contractor. For example, if you need a plumber to address some problems, search Google for plumbers in your area to read about some of the top-rated plumbing services in your city. 

There are a few techniques you can use to tip those negotiations in your favor. For example, focus on the positives (if they do the repairs, they get to sell the house quicker), don’t overload the list of requests, and know when you would be willing to walk away. Another good tip is to let the seller pay for repairs with escrow money after the purchase — you get your money, and they can wait until they actually have the cash.

This negotiation phase can be stressful on both sides, so it’s useful to remember that you both want the same thing. You want the house, and they want to sell it. As long as you are both reasonable and willing to compromise, you will find the arrangement that allows that to happen.

When you’re ready to buy or sell, Marin Real Estate can help you navigate the market with ease. Get in touch with us today by calling 415-847-0309.