Before purchasing a house, a buyer will typically request a home inspection. The inspector may uncover a long list of problems, some minor and some major. Depending on the circumstances, you may have to make repairs or you may be able to compensate for problems in another way.
Which Things Do You Have to Fix?
A lender won’t release funds for a buyer to purchase a house with serious problems. If the home inspector finds major structural deficiencies, safety hazards or building code violations, the buyer’s lender will most likely require you to repair those issues before it will approve a mortgage.
Sellers are not required to fix cosmetic issues or to repair problems that were caused by regular wear and tear. Other issues that fall in between are negotiable. Your state’s laws may affect your liability for issues that are discovered in an inspection.
How Should You Handle Problems?
If you aren’t required to make certain repairs, you and the buyer can work together to figure out how to address them. You may choose to make some repairs but not others, offer the buyer a credit on the purchase price to cover the cost of repairs or lower the asking price.
If the buyer threatens to walk away unless you make specific repairs, it may be in your best interest to do as requested. If the deal falls apart, you will have to look for another buyer and have to disclose problems that you became aware of from the inspection report. If major problems were found, you will have to repair them anyway before you will be able to sell the house.
Reducing your home’s price can help you avoid the hassle of making repairs yourself and can prevent a delay in the closing. Before you lower the price, get a few quotes from local contractors. Many buyers overestimate the cost of repairs and ask for a price reduction that is much larger than what it will actually cost to fix problems.
You can offer a credit that will reduce the buyer’s closing costs to offset the cost of repairs. That may be a win-win because it can allow the buyer to choose a contractor and have the repairs done to his or her standards and let you avoid the hassle of having repairs done yourself, finding that the buyer is dissatisfied with the results, having to figure out whether to make more repairs or not go through with the sale at all.
Review the inspection report and discuss it with your real estate agent. Ask which repairs you are required to make, which are negotiable, and how to handle the buyer’s requests. Be willing to negotiate with the buyer when appropriate, but stand firm if the buyer demands that you pay for cosmetic repairs.