Asking Sellers for Help to Fix Defects
Last updated May 2018
Once you get an inspection and know what’s wrong with your potential future home, it’s time to decide what to do about it.
As we discuss in our previous section, if you or your inspector suspect a major problem, it’s a good idea to get a second opinion from specialists and some estimates to fix it.
Then, well, here’s where things can get ugly.
In Illinois, home sellers aren’t required to repair anything.
If your mortgage is via an FHA or VA loan program, special considerations apply. For example, among other requirements, both mandate properties have proper drainage, undamaged roofs, and safe wiring. In theory, an appraiser will look for these issues and insist on repairs for these types of defects before closing; in reality, most FHA/VA appraisers don’t look for these problems, but you could easily alert your appraiser to issues found during your home inspection. But if the seller doesn’t want to make the repairs and quits the deal, you will have wasted a lot of money on a home inspection and appraisal. Because it’s possible one of these programs could require repairs, some sellers avoid offers with these financing arrangements.
No matter the problem, you can ask the seller to pay for the repair or to kick in money for your closing costs for you to deal with it later on. If your offer includes a home inspection contingency, you have a lot of leverage in that you can back out of the deal if you and the seller can’t resolve any differences. But even if you waived your inspection contingency, it is worth asking for help paying to fix problems you discover—you just might get some. Keep in mind that in parts of the Chicago area, the home inspection contingency clauses often include language that says buyers can’t back out of the deal due to minor repairs costing less than $250. Also, if you didn’t include an inspection contingency with your offer, if you back out you risk losing any deposit you placed in escrow.
Start by talking with your agent about what arrangements are most typical for the neighborhood and the type of sellers you’re working with. In some areas, where several buyers line up for the chance to purchase each home, you can’t ask for much for fear of losing the deal. But often, even in very seller-friendly environments, it’s still okay to ask for repairs before closing—handing off a defect-free home is often seen as simply the right thing to do.
Our advice: Pick and choose your battles. If expensive repair work is needed, sellers should help pay for it—or the home’s price should reflect it. But if there are just lots of small problems, or if it might cause a rift, don’t insist that every single outlet works and that every slightly loose cabinet door gets tightened—too many real estate deals founder over $100 worth of repairs. Either ask for a few hundred dollars at closing to deal with minor annoyances, or pay to repair them on your own after you take possession.
When asking for money to pay for repairs, first get estimates from reasonably priced pros so you can supply accurate costs (all the undercover shopping we do here at Checkbook will help you identify low-cost help). Nothing frustrates sellers more than buyers who demand ridiculous sums of money at closing to pay for inexpensive fixes—it makes sellers think they’re just getting squeezed for extra closing money. Again, whenever possible seek middle ground.
Have a difficult seller who refuses to spend a dime? At some point, all buyers must decide whether they want to buy the house or pass.