And now you wait for what you know is coming next: the repair request addendum. The Buyers have reviewed a detailed report the home inspector provided, and are meeting with their Realtor to draft up a list of requested repairs. You are praying that the Buyers will be reasonable and that the repairs asked for are within your budget.
Some Survival Tips
1. Keep it in perspective. This is a normal part of any home purchase these days. Keeping a clear head and taking the emotion out of it will help keep the sale together and proceed smoothly on to closing.
2. Time is on your side. Even if the repair list is long and seems complicated, don’t panic. You have time. You will be given a number of days (typically three days here in the Louisville, KY market), to reply to the Buyer’s request for repairs. This buys you time to call your electrician, roofer, plumber – whatever the case may be – and get pricing from each contractor so that you can know how to make an informed decision. Getting these estimates will help you decide how to reply to their requests.
3. Buyers often “ask for more and settle for less”. I have seen this played out time and time again. The Buyers will simply “copy and paste” the entire summary list of recommended repairs and ask you to take care of each and every one of them. Once again, keep calm. Sometimes the items are really meant to be informational for the new owner only, such as “recommend replace caulking around the tub”, but the Buyers will ask for it anyway. The question is: Is this something the Buyer just threw into the mix, or is it really important to him? Do you reply “no” to this request, or just go ahead and make the repair to help ensure the deal goes through? Keep in mind that in our Louisville market the Buyer can opt to void the contract if an agreement cannot be reached on repairs.
4. There may be other options. Especially if closing is days away instead of weeks away, you really may not have time to get all of the requested repairs finished in time. Another option that often works well is to offer to reduce the price of your home commensurate with the cost of repairs. Sometimes it is possible to offer to pay some or all of the Buyer’s closing costs and/or prepaid items in lieu of repairs. (You will want to check the real estate laws in your local area.) Bear in mind, however, that some repairs may be required to be completed prior to closing in order for the lender to agree to close the loan. Two examples of repairs that may be required prior to closing would be extensive roof damage and termite damage.
5. Show the Buyer you are willing to work with him. If you have to counter-offer the Buyer on the repairs you are willing to complete, make sure that it is obvious to the Buyer that you are negotiating in good faith. That will go a long way in keeping everyone feeling positive about the transaction and working together in an effort to find a win-win.
6. Hire the pros. When repairs are made, make sure they are done professionally. Hire someone well known in your community who you know will stand behind his work and offer a solid warranty to the Buyer. It may cost more in the long run to hire out the repair (even if you are fully capable of doing it yourself), but having that warranty in place will be worth its weight in gold.
Going back to Tip #1, I think the very best thing you can do is to keep a cool head. Even though this is your home, you now have to think of your home as a “product” that you are selling. Keeping the emotion out of it and remembering this is a business transaction that needs to be worked through, one step at a time, will get you many steps closer to the closing table.