It ain’t over ’til it’s over: negotiating home repairs while still in escrow

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Published Date 7/14/2023

Willing buyer. Willing seller. That combo almost always meant that once a deal was agreed upon, both parties don't expect any big surprises even with appraisals and inspections in the offing.

The thing is, until escrow closes (if contingency verbiage is in place) anything that is revealed during an inspection can become a point of negotiation, which means buyers and sellers can often be back at square one with their decision-making.

How so? Realtor.com’s Cathie Ericson says, “Even the dreamiest house will have some problems, and sellers might be open to the notion of fixing a few flaws—with the right persuasion.”

Once the home inspector hands you their report, here are a few ways to negotiate repairs. The absolutely first thing to remember, however, is that line from an old Indiana Jones movie. “Choose wisely.” Your battles, that is. Don’t start nickel-and-diming the sellers on minor, mostly cosmetic things the inspector found. Instead, concentrate your time and attention on major, structural issues. A resale home is like a used car. It’s not fresh off the factory assembly line and you knew that when you made the offer.

A cracked faceplate on a light switch means (heaven forfend) you’d have to head to the hardware store and spend under $8 on a new one. A piece of trim or part of a fence that was painted badly or not at all does not justify jumping up and down over it. Pointing out trivial items such as these to the sellers will no doubt annoy them. You have bigger fish to fry.

Two seller MUST-FIX items are: (1) Water penetration/intrusion issues, such as a wet basement or moldy walls (2) Local code safety violations, such as missing handrails or an unstable deck. Your lender will likely require certain repairs to take place before funding your loan. After all, they are taking a chance on this house as well. As such, certain repairs listed on the home’s appraisal report will have to be fixed, too.

The big stuff that begs the question of negotiation includes items like foundation issues (like huge cracks in the concrete slab or a floor that slopes), ancient ungrounded electrical wiring, old galvanized water pipes or anything that leaks, vital roof repairs, rotting sewer pipes, or heating/cooling systems that are determined to be on their last legs. This is serious stuff, not to be trifled with.

Any and all of this requires research as well as a degree of judgment on the parts of both buyers and sellers. A visible sign of water damage that was remedied several years back which needs little more than some paint or drywall repair is not a battle to fight. It’s quite another thing to have evidence of how fresh the leak is, how extensive the damage still is, and then get an estimate of how much it will cost to fix. The more specifics and backup you can provide, the better. Even a home inspector or appraiser will hesitate to test out what appears to be a shaky porch or balcony with their own weight, but you can be sure that they will voice their concerns.

Once a seller has agreed to sell to you, understand that in their mind, the proverbial diva has already sung. It’s all over but for the standing ovation, when they receive their funds from the sale. So rather than try to get the seller to coordinate and pay for the work, ask for a “repair credit.” That means the buyer can knock the amount of the repair off the price of the home.

Ericson asked New York-based professional inspector Scott Brown about this. He recommends asking for a repair credit on any problem that’s more than $500. “This is actually in the buyer’s favor, as the seller no longer has a vested interest in ensuring the job will be done right. Otherwise, the home seller will almost always find the cheapest available contractor or family member to fix the problem,” says Brown. “Meanwhile, you as the buyer would, of course, prefer the best contractor available.”

Realtor, TBWS

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