By Dian Hymer
Home buyers typically make their purchase offers contingent on inspections. Depending on how the offer is written, the buyers may have the right to withdraw from the purchase agreement without penalty if the inspections aren't satisfactory. In fact, however, most buyers don't back out when they find out that the home they're hoping to buy isn't perfect.
This is because it's rare to find a home that is completely free of defects. Even new homes can have problems if the building inspector didn't scrutinize the construction carefully enough or if building materials were defective. So most buyers are faced with a decision about what to do when they discover defects during the inspection process.
Builders of new homes are usually amenable to fixing defects. During the construction process, there are often a lot of details that are overlooked. It's not uncommon for buyers to create a punch-list of items that need to be completed before the buyers take possession.
Dealing with inspection issues on existing, or used, homes is a different story. Most home sellers don't have a construction crew that can take care of punch-list items. And, many sellers aren't inclined to repair defects that they have lived with for years.
Some purchase contracts specifically state that the seller is responsible for transferring the property with all systems in working order. In this case, the seller might be obliged to repair certain detects, like it or not. Otherwise, inspection-related issues are often resolved through negotiation.
House Hunting Tip: Buyers are often successful in convincing a seller to fix, or help fix, a problem that no one knew about before the inspections. The new information could be an issue with any buyer. Sellers may also be amenable to repairing defects that relate to health and safety issues, like a heater that leaks carbon monoxide.
Getting too carried away with your requests can backfire. For instance, appearing to nitpick by asking the seller to repair minor defects can anger the seller to the point where he'd rather call the deal off and find another, more reasonable buyer.
You may find a seller more agreeable to helping correct defects if he doesn't actually have to complete the work by closing. For example, rather than asking the seller to replace the leaky shower at a cost of $4,000, you could ask him to credit you this amount at closing.
With this approach, the seller pays to correct the defect, but you have the work done after closing. This relieves the seller of the hassle of having the work done. Also, there may not be enough time to have the work done by closing.
The buyer benefits from this approach because he can oversee the work to make sure that it's done correctly. There's an additional advantage if you want to make changes during the construction project, or incorporate the repair into a larger remodeling project. Just make sure that the contractor who issued the bid to the seller will honor his price for you.
Instead of asking the seller for a credit, you could ask the seller to reduce the purchase price by an equivalent amount. If your property taxes are based on the purchase price, this approach might be preferable if you have enough of your own cash to pay for the repairs.
The Closing: In either case, if you change the terms of the purchase contract, be sure to let your lender know before your mortgage documents are drawn. A price reduction or credit will have to be approved by the lender's underwriter.
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