If you’re a home buyer or seller and you’ve made it this far, Congratulations! You’re so close to finishing the deal and there’s just one last thing to negotiate: the repair addendum. This potentially contentious part of negotiations is where buyers can walk away or sellers can decide that making repairs isn’t worth the hassle and put their home back on the market. It can be either an intentional or unintentional unraveling point of the process and maintaining professionalism is key.
Once the inspection is finished, the buyers have a complete picture of the condition of the property. However, “the inspection report is not a repair list for the seller, nor is it a stick to beat the seller with on price.” Unless there are safety issues, structural damage or infestation problems revealed, the inspection is merely a guide for the buyers on what to expect in the future.
A typical repair addendum only includes what the seller is responsible for fixing as required by law. Reasonable requests include items that are “significant enough to impact your use of the house negatively,” such as major roof problems, structural deficiencies, immediate plumbing or HVAC items. Unreasonable requests should be advised against by your Realtor. Examples of an unreasonable request that a seller is unlikely to honor are known conditions like peeling paint or deteriorated driveways, old components that are perfectly functional like appliances, furnaces or the water heater. Anything cosmetic, not affecting the safety and value of the home, don’t qualify as good negotiating points to lower the price of the property.
After the inspection, in Virginia, you have 7 days to negotiate the terms.
Options:
A. The seller can make the request repairs which have to be completed by licensed contractors and with the entailing paperwork.
B. The seller can offer a credit toward closing to cover repair costs. Note that this credit cannot exceed closing costs. This is often a happy conclusion for both parties, however, the buyers are not obligated to accept a credit.
C. If the closing costs exceed the repair costs, it may be suitable for the seller to lower the sale price, however, the seller may decide not to do this.
If nothing is decided upon after those 7 days, you then have 2 additional days to decide what to do. At 5 pm on the second day, if nothing is decided, then the contract automatically terminates and both parties go their separate ways.
While often the repair addendum is the stickiest part of the homebuying process, if both parties negotiate reasonably and professionally through their agents, there’s no reason it should be the downfall of a prosperous deal for both parties.
