Guest article by Jim McKinley of Money With Jim

Buying a home can be a long – and often stressful – process. The home inspection is one of the last hurdles before closing and finally getting the keys to your new home. But what happens when multiple issues are discovered by the inspector – who will pay for the repairs? The answer depends on the law, the contract, and your negotiating skills.

What’s legally required?

States have laws that determine non-negotiable things that a seller is obligated to pay for after a home inspection. Generally, the seller is responsible for repairing things to bring the home up to code, fixing severe water damage, remediating mold issues, and replacing broken or missing smoke detectors.

Also, disclosure laws may require that the seller notify the buyer of major issues before the contract is signed (if they are aware of the problems). Thus, they may be responsible for such repairs if you were not notified about them. Your real estate agent can tell you more about the specific laws in your state and what exactly is required of the seller.

Can the buyer back out?

Most standard real estate contracts have an inspection contingency that says the buyer can back out if any major problems are discovered during the home inspection. As Redfin explains, unless you agreed in the contract to purchase the home “as-is” and waive this contingency, you can choose to not move forward with the sale.

However, if you agreed to buy the property “as-is,” that typically means that the seller will not make any repairs nor offer any credits for defects to the home or the property. This includes major issues such as structural damage, mold problems, leaking roof, termite infestation, or even the presence of asbestos. Of course, you can still ask the seller to pay for the repairs, even if you signed an “as-is” contract, but they are under no legal obligation to agree.

What can be negotiated?

Beyond the legal obligations of the seller, everything else is up for negotiation. If it’s a buyer’s market, the seller may not want to risk losing the sale and would be more inclined to accommodate your requests. However, if there were multiple offers on the home or if it’s a hot seller’s market, they may refuse. If your goal is to get the most costly repairs paid for by the seller, then don’t nitpick with a list of a hundred small items. Instead, ask for the seller to address issues that matter most to you.

Should the buyer ask the seller to make the repairs, or simply deduct the costs?

If you want to use your own contractors, then it might be advantageous to ask for the repair costs to be deducted at closing rather than having the seller handle the repairs. However, if you believe that more issues might be discovered once the repair work begins, then it may be a good idea to have the seller get everything fixed on their own dime before closing.

Can the buyer ask for a warranty?

If you find that the HVAC system, plumbing, or appliances are nearing the end of their lifespan, you can ask the seller for a home warranty. These warranties will cover the costs of repairs on certain appliances and systems for a set period of time. According to ReviewHomeWarranties, the average home warranty in the U.S. costs $616 annually. The buyer may decide that purchasing a warranty is cheaper for them than replacing or repairing the items on your fix-it list.

A thorough inspection can reveal a lot when you’re buying a home. With a little negotiation and knowledge of your local laws, you can ask the seller to address your concerns. Though unexpected repairs can be a hassle, if they are addressed quickly and properly, you’ll soon be closing on your new home in no time

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