Negotiating Repair Requests

Buying a Tucson Home - InspectionsOnce the purchase offer is accepted by both parties, the Buyer is entitled to a 10 Day Inspection period to determine the condition of the home. Buyers will usually hire a Home Inspector and Termite Inspector, and sometimes a Roof Inspector, to inspect the home. All inspections must be completed within the ten day period.

Before the Inspection Period expires, the Buyer will submit a form that is used to request the Seller repair some items found in the inspections. The Buyer can elect one of the following:

Cancel the offer and return my Earnest Money: Usually Buyers give the Seller an opportunity to repair problems found in the Inspection, but sometimes the problems are too great to overcome – a foundation problem is one that might result in a decision to cancel.

No Repairs requested: Buyers will select this option if the home is in excellent condition and does not require any repairs, or if the Buyers are purchasing the property “As Is”.

Buyer requests you repair the following (list): This is the most common response. If the request is “reasonable”, the Seller will often agree to make all of the repairs. If there are some items the Seller does not want to repair, they will send this response to the Buyer for consideration.

If the Buyers request that repairs be made, the Seller has three options:

1. Agree to make All Repairs: If the repairs are reasonable and necessary, the Seller may decide to agree to make them. If they agree to repair all items, then the Inspection Period is over and the Buyer’s option to cancel is expired.

2. Agree to make No Repairs: The Seller may make this election if they believe the repairs are unreasonable or they simply do not want to incur the cost of making them. The home price that was negotiated should cover any repairs.

3. Agree to make Some Repairs: The Seller will often make this election to cover only the major items, especially those that should be repaired to maintain the home’s condition.

If the Seller’s response is #2 or #3, the Buyer is given one more opportunity to decide if they will continue with the purchase or cancel. The Inspection Period is over and the Buyers have only two options:

1. Agree with the Seller’s Response: In this case the Buyers agree to continue with the home purchase.

2. Cancel the Purchase: In this case the sale is cancelled and the home will be placed back on the market.

In addition to home inspections, the Buyer is also entitled to receive a Seller’s Property Disclosure Statement and an Insurance Claims history. The Seller’s Property Disclosure Statement (SPDS) is a seven-page document that asks the Seller what they know about the history and condition of the home. It asks what repairs have been made and if there are any known problems.

The Insurance Claims History checks for any claims over the past five years, less if the Seller has not owned the property that long. This is an additional protection for the Buyer as home inspections are limited to what is visible.

All of this takes place during the Inspection Period. Buyers may not cancel the contract once the Inspection Period is over and any repairs requested are agreed to.  The Appraisal comes next, which was covered in an earlier post.

There is one more Buyer Inspection, which is called a “Pre-Closing Walkthrough”.  This usually occurs a few days before closing and is NOT intended to find new problems. Its sole purpose is to ensure that the home is in substantially the same condition as when the offer was accepted, AND that any agreed upon repairs have been made.

Note that the Seller must make their home available at reasonable times for these inspections and must keep the utilities on for the entire period. We recommend that you schedule the utilities to expire on the closing date.

Next: Signing & Closing
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