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Phase II: Negotiation of Home Repairs

You thought it was all over after the contracts were signed and everyone agreed upon the terms of the purchase of the house. Well, that was only Phase I of your negotiations. Phase II begins after your home inspector provides you and your real estate agent with a report on the conditions of the home.

One of the most frequently asked questions of a home inspector is, "What do I ask the seller to repair?". Our response to that question is an easy one, "Consult with your real estate agent". It is the buyer's agent that has the responsibility to work with the buyer and to use the information we provide them in our inspection report to negotiate items for repair or correction. Your agent has a wealth of knowledge that will aid him/her with this process:

1. The disclosure statement
2. The contractual agreement
3. The cost of the house relative to the selling price
4. What are "appropriate" repair request and what are "inappropriate" repair request
5. The intensity of the buyer's desire or need to purchase the house.

The buyer has a legal right to a signed copy of the Residential Disclosure Statement prior to signing the Offer to Purchase. This document should provide the buyer with information on the house related to any known adverse conditions existing in the house as reported by the seller. Unfortunately this document often gives little information on the condition of the home. Also, simply because a seller reports a deficiency in this document does not mean that the buyer cannot be asked to have it repaired.

The contractual agreement is the best starting point when the buyer and agent are composing their repair request. For the most part what is negotiable has already been agreed upon in the Offer to Purchase Contract, Sections 13a, 13b, 13c, 13d, 13e.

The buyer does not have to accept the inspection/repair section of the contract as written. The buyer has the right to author this section as he/she wishes. It may not be accepted by the seller, but the buyer has this right.

Section 13 is very specific but at the same time becomes vague and open for interpretation. Again, this is where the expertise of an agent is essential. This section starts by giving the buyer the right to have an inspection at their own expense. It goes on to list the components of the house that are included in this agreement:

Built-in-Appliances Electrical System Plumbing System
Heating/Cooling Systems Roof Coverings Flashings
Gutters Doors Foundations
Windows Exterior Surfaces Structural Components
Columns Chimneys Floors
Walls Ceilings Porches
Decks Fireplaces Flues
Attic Ventilation Water System Crawlspace Ventilation
Sewer System    

The wording in this section does not say the above items are in great, perfect, and wonderful shape. The specific language used is important in the process of negotiating. It states, "...shall be performing the function for which intended and shall not be in need of immediate repair...". This is the key statement which one needs to address when considering adding one of the above items to the repair request. This statement is vaguely written and is not specific, leaving (in some cases) much room for one's own interpretation.

This section goes on to say that with the following items "there shall be no...":

Unusual Drainage Conditions
Evidence of Excessive Moisture Adversely Affecting the Structure(s)
Friable Asbestos
Environmental Contamination

This terminology is specific and does not leave much room for interpretation, however, the buyer may have to document that one of the above conditions exist.

Section (b) of the contract provides the buyer with the right to have a wood-destroying insect inspection by a licensed pest control operator at their own expense. This is required by most loan institutions. This section clearly states that the expense of the treatment is the responsibility of the seller unless otherwise agreed upon in writing. Section (b) does not state that the repairs are the responsibility of the seller. However, if the wood-destroying insect damage has caused one of the above mentioned components (in section a) to be in immediate need of repair and it is no longer serving the purpose for which it is intended, then the seller can be asked to make the repairs.

The buyer through his/her agent will provide the seller with a written repair request. If the buyer wishes for a certain method of repair to be incorporated into an item of repair, this should also be included in this written request. An example of a specific request statement might be, "Remove the 8 foot section of rotted floor joist and replace with new 2"X10" Southern Yellow Pine. All deteriorated wood is to be completely removed from the crawlspace". A nonspecific statement dealing with the same repair might be, "Fix the rotted floor joist". Most home inspectors offer a reinspection to insure the buyer that the repairs were performed properly.

The standard North Carolina Offer To Purchase And Contract provides the seller with three options:

1. Completing the repairs
2. Providing money for completion of the repairs
3. Refusing to complete the repairs.

If the seller elects not to complete or provide for the completion of the repairs, the buyer has the following options:

1. Accept the property in its present condition
2. Terminate the contract if request meets the contractual standard. (check with your attorney)

It is recommended that this process be followed in a systematic manner as spelled out in the contracts and agreements made by both the buyer and seller. This phase is just one small component of the entire home buying/selling process that reinforces the need for a competent and knowledgeable real estate agent.


 

Home |About Your Inspector| Inspection A Must | Phase II | PreMarketing Inspection
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