Who Pays For Repairs After A Home Inspection?
Before closing on your home, you’ll have a home inspection. If any problems are found during the process, you may wonder who's responsible for paying for them. Is it you, or is it the seller?
Who pays for repairs after a home inspection depends on several factors. It depends on what needs to be repaired, the contract you have with the seller and your location.
Knowing what repairs the seller is responsible for can prevent you from spending more money on costly repairs after moving in. It can also help when it comes to negotiating with them about who’s responsible for what repairs.
What Repairs Are Sellers Responsible For
The repairs the seller is responsible for depend on your agreement with them. Because of this, it’s difficult to give a definitive list. However, we can discuss important factors that help determine who’s responsible. These factors include your contract, type of repair and the laws in your state.
Your Offer Contract
Putting in an offer to buy a home is an exciting time! Once you find a home that meets your needs, you might want to move in right away. But how do you know the home doesn’t need major repairs? You probably don’t want to purchase a home that has major deficiencies.
To protect you from buying a home without knowing what’s wrong with it, you or your agent can and should add a contingency clause to the contract. The contract should state that the offer is contingent upon the results of the home inspection report.
In that case, the seller would be responsible for certain repairs. The only time this isn’t the case is when you agree to purchase a home as-is. When that happens, you’re usually responsible for making the repairs yourself after moving into the home.
If you don’t want any surprises that’ll increase the cost of homeownership, choose to include the contingency clause in your offer agreement.
Type Of Repair
Another important factor is the type of repair that needs to be made. For example, let’s say that during the home inspection, you find that the caulking on the windows needs to be redone. Although it’s important, it’s not a deficiency that will endanger your safety.
However, imagine that the home has a faulty electrical system that needs to be replaced and the fire alarm system doesn’t work properly. In this case, if these repairs aren’t made, it won’t be safe for you to move in.
Some lenders won’t finance a home purchase if this type of work needed to be done. Be sure to check with your specific lender and understand the eligibility requirements of your loan type.
The Laws In Your State
In some states, there are laws that require the seller to disclose known property issues. For example, Louisiana law requires that the seller provide you with a disclosure form. In some states, the law will require the seller to fix property issues that violate the building code, like structural violations or fire safety violations. For other repairs, you’ll have to negotiate with the seller to determine who will be responsible.
It’s important to know what to look for during a home inspection. Along with structural and electrical issues, be on the lookout for problems with:
- Pest infestations
Keep in mind, the home inspector will help you identify these problems.
How To Negotiate Repairs After A Home Inspection
After you receive the home inspection report, you should begin negotiating with the seller to decide who’s responsible for what repairs. If you’re working with an agent, they’ll probably provide you with a form to submit your buyer requests.
The buyer request form should include a list of repairs you want made, along with the desired remedy. For example, it might include the problem of a light fixture not working and the desired remedy would be to fully replace the fixture.
After you send this document to the seller, depending on the contract, they’ll have a certain amount of time to respond. They may accept your request, counter or deny it.
Instead of performing the repair themselves, they may offer to give you a credit for the repair or lower the purchasing price of the home. That way, you can use the credit or money saved from a lower purchasing price to do the repairs yourself.
Once you make your final response, if the seller agrees, you can proceed with closing on the home.
When To Walk Away After Home Inspection
If the seller doesn’t agree to a repair you think is a deal breaker, the agreement should include a walk-away clause, which will allow you to walk away from purchasing the home. For example, your deal breaker might be not wanting to tackle a home project like caulking the windows yourself in the first year of homeownership.
Here are some scenarios where you should consider walking away:
- The cost of fixing the home makes buying the home unaffordable
- During the home’s inspection, you uncover serious safety issues or structural damage that will be difficult to repair
Before making your final decision, weigh the pros and cons of walking away. If you find that the pros outweigh the cons, maybe it’ll be better to stay and make the necessary repairs yourself.
For help making home improvements and repairs, consider taking out a personal loan with Rocket Loans®.
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