Inspection report is requiring licensed contractors

10 Replies

Hi,

We just received the inspection report back on a flip we're selling and the buyers have written into the contract that all work must be performed by licensed and bonded contractors. Even for something as small as putting a strap on the hot water heater and fixing a few cracked siding shingles.  My wife and I are perfectly capable of doing these repairs ourselves which they fully intend on having the inspector re-inspect.  We haven't said yes or no to the inspection list yet so my questions are:

1) are the repairs required to be done by a licensed professional?

2) can we counter back and say "repairs will be done in a professional manner" but not by a licensed, bonded professional unless required by law?  None of the changes are electrical in nature but some are plumbing but I don't think a plumber should be required since its just small leaking faucet type stuff.

3) has anyone ever counter back like that and did it scare the buyers off?  These are first time buyers who seem easily scared.

How is the market there. Did you have offers lining up. Very tight inventory? Who is in the power position, seller's market or buyer's market. That would be the first thing I would consider if I were in your position. I am like you, if it is work that is not requiring a permit to do, it doesn't need to be done by someone with a license.

Maybe counter back the plumbing will be done by a licensed plumber, the rest in a  professional manner.

Have you had lots of affers , a bidding war ?  Its a small price to pay

Pretty standard wording in every inspection report I've ever seen.  I just tell them no.  Gently, of course, but I tell them I've got crews and employees and they do all the work for me.   I say the same thing when they ask for receipts.  Rarely do I get any pushback.   I'll agree to use licensed folks for major work, but I'm not gonna pay a plumber to swap out a garbage disposal when I can do it (not that I do, I have my handyman do it, but you get the idea).

Here in LA you can get a homeowner's permit, which mean the homeowner can do the work as long as it is up to code.  Also here, if you having lots of problems with the inspector, you can call in and state your case and they will send you a different inspector in some cases.

Originally posted by @Ellie Hanson :

Hi,

We just received the inspection report back on a flip we're selling and the buyers have written into the contract that all work must be performed by licensed and bonded contractors. Even for something as small as putting a strap on the hot water heater and fixing a few cracked siding shingles.  My wife and I are perfectly capable of doing these repairs ourselves which they fully intend on having the inspector re-inspect.  We haven't said yes or no to the inspection list yet so my questions are:

1) are the repairs required to be done by a licensed professional?

2) can we counter back and say "repairs will be done in a professional manner" but not by a licensed, bonded professional unless required by law?  None of the changes are electrical in nature but some are plumbing but I don't think a plumber should be required since its just small leaking faucet type stuff.

3) has anyone ever counter back like that and did it scare the buyers off?  These are first time buyers who seem easily scared.

 Counter with, work will be done by seller in a professional handyman finish repair and up to code, re-inspection will be up to buyer. If seller insist on having the repairs done by a licensed and bonded contractor, seller will shoulder 25% of the contract.

All great suggestions in the above posts.

I would add that you counter with "work will be done in a professional manner and inspected by a licensed professional"

I don't think it would break the bank to pay a plumber for 1-1.5 hours just to come check the work and give you a quick report that its all good.

Sellers generally " rig it " for as cheap as possible when selling. After they collect the cash they are hard to find.

Not saying all sellers but it does happen.

I could see the buyers wanting a licensed and bonded person doing the work. If there is a problem they have recourse.

You could possibly offer a buyers credit and let them do that repairs after closing for mainly cosmetic stuff as long as the lender required items are fixed before closing. This way the buyer cannot complain about the level of quality and repair because they are doing it themselves after closing.

The sellers want the cheapest repairs because they are selling and will no longer own the property. The buyers want the best quality and most expensive because they will be living in the property.

No legal advice given. 

Remember you are dealing with people. It is easy to get caught up in all of the language after these contracts go through the "legal department". Just call the buyer / buyer's agent and walk through the list. "A, C, D, and F I will have a licensed electrician/plumber/whatever repair, and B, E, G, and H will be addressed by my crew". As long as they can come back and see the inspection, it will be no problem. Just had this come up on a home in Stamford. Plumber had to take care of the boiler related items, but our team was able to do the little things, and the buyers were fine with that.

Thanks everyone!  I countered with "done in a professional, workman like manner" and told the buyers agent we'll be using contractors for most of it. He wants the CCB numbers for my guys which is fine.  Its so cool to see all the advice on here.  I've basically take it all.  Contractors for some, workman like manner for some, buyer credit for some.  The market is hot hot hot here but the offer was awesome and we don't want to have wasted all the time with these particular buyers.  Plus, as we grow our flipping business we want to be known for quality work. The house is so cute and well done that we'd live there if we didn't 1) love where we live and 2) have an investor that needs to be paid off.

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