What about Repair Requests?

So you are finished with the Home Inspection and you have received the final inspection report from your home inspector filled with photos and info regarding your home.  You may be concerned regarding some of the information you are finding in the report.  If you were present during the inspection, you may already know what your major concerns are, but don't know what to do next.

This is the point where you get back with your Realtor, who has your highest and best interest forefront.  You will both go through the report together and discuss where there may be concerns for you.  According to your NKY contract, you will have 3 different routes to take at this point.  

1.  You are satisfied with the report and wish to proceed with the contract without any repair requests made to the seller.

2.  You are greatly disturbed by what you found in the inspection and wish to run from the contract.  Your Realtor will write up an addendum called, "Release from Contract", based on your findings, and ask for your earnest money to be returned to you.  (Earnest money is given up front with your offer in good faith that you wish to proceed with the contract.  You can think of it as a down payment against what you will need to bring to closing, as it will be listed as a credit at closing towards what money you owe at closing.  However, the seller will be thinking of this as money he will have dibs on if you decided to breach the contract illegally.)

3.  You are still in love with property, but there are a few items of concern.  If these were repaired, you would be willing to move forward with the contract.  At this point, your agent will create an addendum for these repair requests, have you sign it, and then present it to the listing agent to share with the seller.  There is a specified number of days the seller has to respond to these requests.  The seller can decide to repair all, some or none of the items listed.  

It is important to note here that the seller is not obligated by law to make any repairs.  This is actually called out in your Purchase Contract. However, most sellers will consider your repair requests and most will do at least some of them, if not all.  They might also decide to not do the actual repairs, but compensate you with some sort of price reduction, change in any pre-paids such as closing costs, or have a check created at closing from their proceeds to a contractor who will do the repairs after close. All of these alternatives, of course, would be specific to each property and contract terms, so don't think you as a buyer can orchestrate how the repairs will be done.  A lot of it depends if certain repairs must be done prior to closing to adhere to lender guidelines.  And just to note here, the seller is not obligated to make any repairs that your lender deems necessary in order to adhere to lender guidelines.  All of that said, we do find that most legitimate repair requests are considered by the sellers.  However, you as a buyer must realize that your home inspection report is NOT to be considered a full repair list for the seller.  The repairs you find most important to you are the ones you should be concentrating on. 

There is one other consideration to mention here.  The appraisal is usually ordered after you have completed your home inspection period and successfully negotiated any repairs.  That said, if the appraiser finds anything that needs repairs to adhere to the loan guidelines, this will be written up as a condition to be remedied before the loan can be satisfied.  (If you have an FHA loan, an FHA appraiser will be ordered to go into the property.  If you have a VA loan, a VA appraiser will be scheduled.  Each individual appraiser will be looking for those conditions that are not suitable for the loan he/she is appraising.)  The lender cannot proceed with the loan until those repairs are made.  So even if you settle on repairs with the seller during your home inspection period, there may be an extra repair needed after the appraiser walks through.  With the help of a good Realtor by your side, you will most likely be able to determine upfront any repairs necessary in order to comply with your specific loan type and these would normally be one of the repair requests you would make to the seller.

As previously mentioned, if the seller decides to not do any repairs, he is acting within his legal rights. This could, of course, result in you deciding to exit the contract because these repair requests were a "make it or break it" item with you.  You may, on the other hand, reconsider the fact that the seller is not repairing anything and decide to move forward anyway, as long as the appraisal doesn't turn up any repair needs. Totally up to you. This will either keep you in the contract or you will exit the contract because these repairs were mandatory to you or the loan guidelines.  Your Realtor will guide you safely in these changing waters, so always be sure to hook up with an experienced and knowledgeable agent.

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