The best time for negotiating home repairs

negotiating home repairs

So, you've been home shopping and you come across a three-bedroom cape in New England that you absolutely adore. It's on a terrific street with other young families, walking distance to the local business district and schools, with parks and hiking trails in the immediate area.

With a little work, it could be a spectacular starter home, even a permanent one. The listing price is a little high, but affordable. However, it needs work.

  • The roof and gutters look ancient.
  • There are signs of water stains in the basement.
  • The furnace is ancient, over 20 years old by the serial number.

It's really a seller's market at the moment, so your concern is how exactly, should you tactfully express your concerns for negotiating home repairs and still keep the prospect of making a deal alive?

The subject of repairs directly impacts the sale of the home. It can get uncomfortable, contentious even, and can lead to a failed sale for the home seller or an opportunity lost for the buyer. 

During the buying/selling process, there are two windows of opportunity to best address repairs. 

1. Negotiating home repairs during an offer

You, the home buyer, are ready to put an offer on that three-bedroom cape for $400,000, but the garage door needs to be fixed, and it will cost more than $500. How does the buyer approach the seller about it?

  • The buyer can make the offer contingent that the seller repair the garage door prior to the closing. 
  • The seller could reduce the price by the amount of the repair and let the buyer fix it after the closing. Or, the home seller could rebate the amount of the garage door repair to the buyer at the closing.

"For me, the best course of action for the home seller is to take off the amount of money it costs to fix the garage door at the closing," said Rich Rubino, CEO of Best Agent Today. "If the buyer requests to fix before the closing, and the seller doesn't wind up closing, the seller is out $500. The seller offering to reduce the sale price might affect other offers if the buyer doesn't close.  So, taking money off at the closing guarantees the homeowner doesn't pay out of pocket to fix the garage door, and the buyer still gets the new door.

"The problem for the home buyer is this," he added. "Let's say you're stretching to buy a house, which we all do. The buyer gets a $500 rebate at the closing, uses the money for something else more pressing, and then never fixes the door."

2. Negotiating home repairs after the home inspection

When necessary home repairs are discovered during the home inspection, the home seller may have less leverage. And many times these items can be quite pricey. For example, a new furnace, water heater, or major roof repairs can run into several thousands of dollars. How to resolve these types of repairs will involve the real estate agents on both sides of the deal, and hopefully, reasonable parties.

"When you initially agreed to the price of the house, there's an implied livability of the premises," Rubino noted. "What the home inspector finds absolutely should be addressed. The mortgage bank may even require it. And hopefully there are reasonable people on both sides."

What we do not recommend

When buying a home, you may find small, cosmetic issues that need repair: a crack in the siding, a loose porch railing or fading paint off a window frame. These are relatively easy repairs that cost little and may just involve a quick trip to the hardware store.  Especially for first-time home buyers, these kinds of issues are really just a regular part of home ownership.  You'll be doing it forever.

"When negotiating home repairs, we strongly recommend leaving the simple ones out of the conversation," Rubino said. "Save the battles for the major issues."

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