What if seller refuses to do repairs?

krdell78 · June 2014

My fiance and I are under contract on our 1st home as of last week. It is not a short sale nor is it as-is. We had inspection on Saturday morning and discovered that the back 6x6 2nd story deck is crap. The wood is splitting, the entire structure is shaky, and is a dangerous hazard altogether. We plan on replacing the deck altogether anyway but am fairly certain that come CO inspection, the deck will NOT pass. We would gladly take a credit toward the repair/replacement but assuming that it will not pass CO insp, something would likely have to be done before settlement. We have given the sellers the option of repairing it or knocking it down. We just submitted the inspection this morning so we haven't gotten anything back. What if seller refuses outright?

jessica490 · June 2014

When we bought our condo our deck was in crappy shape. We asked for a $250 credit to the repairs ourself and that worked out fine.

megaugust3 · June 2014

First off, congrats on finding and being under contract for a home. If you are in a hot market right now, that's an accomplishment in and of itself!

Its likely you've already received a response from the seller at this point, but for future readers or if you are still in negotiations, you DO have a few options.

1) Generally if you are under contract already and the seller has taken their home off the market for a while then it behooves them to continue working and negotiating with you. Thus, you have some leverage there.

2) Your real estate agent is your ticket to success here. Have them argue your point that it may not pass inspection from the lender or township for CO (certificate of occupancy for those of you not yet in the game!). Better to do it now than later in the game and push the timeline back. Have them provide specific date from your CO or U&O guidelines that might state specifics about decking or external services. Overload them with data on your side and its likely they will at least cave to a credit.

3) If they still aren't interested in making the repair right now, thats fine. Wait for it to be brought up in the appraisal or CO. They will have to make the decision then to do the repair when someone other than you, the buyer, are asking for it. Ideally, instead, you can ask for the credit in lieu of repairs. Then, if the appraisal comes back as ok with the hazardous deck, you can still have the funds in your pocket to take care of it yourself.

4) If possible, always try to take care of it yourself. If you can get a credit in place, or have the funds already, then its best to have YOUR contractor take care of it under your watchful eye. When a seller is doing the repair, they are generally looking for the fastest and cheapest way to do it.

5) You can request a decrease in the sales price but generally this doesn't benefit you that much in terms of putting money back in your pocket to do the repair.

6) Lastly, just remember when getting a credit in lieu of repairs, make sure you are in line with your lender's protocol. If you are seeking financing, a lender will only allow for a maximum number of seller credits to you. For instance, even if you are doing 20% down with conventional financing, the lender will only allow the seller to pay for 3% of the sale price. If you are seeking FHA financing, you can get as much as 6%. However, with FHA and VA financing, lenders generally don't like to see the words "credit in lieu of repairs" so make sure you can say that seller credit is going towards your closing costs.

- Meg Augustin, Realtor

Berkshire Hathaway Fox and Roach

216 E Lancaster Ave

Wayne, PA 19087

What if seller refuses to do repairs?

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