If defects are discovered after an inspection, a home buyer and a seller have several options. A buyer can accept the home “as is” and ask for a price reduction or repair credits. They may also request the seller to repair the defects before closing.
The seller can accept a buyer’s request, decline it or offer a counteroffer. If they agree to repairs, certain things can come up. These include:
Who pays for the repairs?
Typically, the seller is responsible for fixing defects discovered during a home inspection. They need to get bids from contractors to see how much the work will cost them and then decide which experts to work with. A seller can also choose to provide a buyer with repair credits (negotiated funds provided at closing so the buyer can cover the costs of repairs).
In some instances, a seller and a buyer may have a standard contract with a General Repair Limit. This is a clause that places a negotiated cap on the amount the seller can spend on repairs. If the cost of repairs exceeds the limit, the seller may choose to pay for all repairs anyway, or the buyer can choose which repairs to be completed up to the limit.
Some sellers and buyers choose to split the responsibility of repairs. For example, the seller can cover major structural or safety issues, such as roof, plumbing or mold, while the buyer handles cosmetic issues like faded paint or small nail holes.
What if the repairs are not done correctly?
If a seller does repairs, the buyer will do a final walkthrough to approve the completed work. After which, they can move forward with closing, or may conclude that the repairs were not done correctly.
Repairs can be complicated in real estate. If you are facing contract disputes related to repairs, you need to get adequate information to determine your next steps.