Seller won’t do repairs

19 Replies

I put an offer of full price on a rental property in allentown pa, the only thing I asked the seller for was a clear certificate of occupancy and he agreed under contract. Now we are a week and a half away from closing and seller does not want to make all repairs that came back from inspection. What should I do? I have $1,500 invested in the deal already from tittle search and appraisal.

Note: this is my first rental property.

Thanks in advance!

Are the repairs needed in order for the certificate of occupancy to be issued? If they are not then I don't really blame him especially if he is giving you a good price. You could try to get the price down further based on repair estimates you receive or you could ask for him to pay the closing costs out of his proceeds.

In the end, you have to ask whether it's worth it to you to buy even if the seller is being a brat. Don't let it get personal, does the deal still make sense?

But on another note, you could ask for a small discount on the price instead and see if that's something the seller would go for.

Many sellers would rather give a $500-$1000 closing credit in lieu of making the repairs themselves. That negotiation is typically done while you are still in due diligence. Are you using a real estate agent? If so, I'd get your agent's opinion on your exact circumstances.

I agree with asking for some sort of credit as suggested above. If the seller does the repairs, the work will likely be done as cheap and quick as possible. You want the repairs done right, so ask for credit instead.

If the seller still doesn't even want to give you credit, just run your numbers again to be sure the deal still works. If not, you can look into walking away from the deal, but hopefully if these are just small repairs of a couple thousand dollars, your numbers aren't that tight anyway.

There tends to be 2 phases of negotiating. The price and/or closing costs phase. And then negotiating repairs/money after inspection.

Congrats on workings towards your first deal! You're learning lessons already. ;-)

@Jean De la cruz

What kinds of repairs are we talking about? (Handrail and some painted window sills?) or replace Heating Unit and reroof home?

Also these are the repairs for the CofO not from your inspection correct?

CoC’s doesn’t mean you need to repair all in the inspection report. Normally they only need bare minimum to be habitable. However if the inspection you are talking about is an inspection result from the city to issue you a CoC, then you are out of luck. Negotiate with the seller and/or ask to refund (likely not happening), small claims or so. You do have a binding contract and assuming you have receipts of your expenses, then you have a chance at small claims.

You didnt mention what the repairs are, and whether they are lender required repairs.  Every house in america will have a plethora of repairs that show up on a home inspection report and the fact of the matter is that most of them will never be repaired because they are items that dont really matter.

Never be afraid to walk away from a deal. If for whatever reason you do decide to walk, $1500 is a small price to pay compared to the nightmare a bad deal may cause for you. 

With that said, it really depends on what type of repairs we are talking about. I do know that as a first time buyer it is hard not to get caught up in the small stuff. When that happens to me I run my numbers again and make sure that the deal still fits with my original game plan. The trick is not to compromise you bottom line just because you want to make a deal "work."

Is your financing tied to a CO? If so, you need a CO to close, which means those repairs need to be done before closing.

If you are self-financing, you of course need the CO, but it's a decision/negotiation on your end. If you walk away, you should get your Deposit back without an issue, but I'm not sure you have a case to sue for damages (your costs).

Maybe the seller is willing to split it? $750 each? Are you working with a realtor? They will sometimes throw in some money as well to make the deal.

I went to see the property again and the repairs aren’t that bad...it’s hand rail to the basement, smoke and carbon monoxide detectors, chip paint in the back and front, garbage in the basement and back yard, broken tiles in the bathroom, ceiling repair in kitchen and and rear porch, fix concrete in back yard and some minor stuff. Seller will do half of those repairs. I sent the seller a new contract where he gives me 1200 and I do all repairs and we close next week. Also he takes the garbage.

If he agreed in the AOS to provide you with a clear Certificate of Occupancy, then you can void the agreement if he refuses to do the work or pay you to do the work by adjusting the sale price. Your stated expenses were your decision and not required prior to inspection completion. May I ask why you did the title work and appraisal before the city's report came in?

@samc I agreed to do tittle search and appraisal since we had agreed for a clear CO under contract. Never thought a seller could just say he wasn’t doing it out of the blue.... lesson learned I guess.

 I suspect your AOS simply states that the seller will pay for the inspection and then you have the right to accept, reject or negotiate for repairs. One thing I've learned over the years; until buyer gets the deed and seller gets the money, anything can happen.

Ask for a home warranty. If the seller is unwilling that is often what agents do so they can get paid.

Hey Jean, this City is going to slam you if stuff for the CO is not done in 30 days of closing. When you say inspection do you mean the Allentown City Inspection required for a clear CO or your own private Home inspection. As people have mentioned already there are going to be tons of things that come on a Home inspection that won't on a CIty Inspection. Have your realtor point out where in the contract it shows they need to provide a clear CO. In Allentown City the seller has to order the City Inspection and provide you with that report if they don't then that clause survives closing and they have todo everything on there.

One of my favorite closing table stories is where a listing agent tried to pull a fast one on me and my buyer by attempting to have us sign that we would cover all the repairs because they had ordered the inspection too late. But I pulled out the contract and showed them line by line where they were on the hook for it all. They threatened to postpone closing but with my buyer being a mom with 4 kids who had already canceled her lease and was packed in a moving truck I was not going to let that happen and showed the seller "this clause survives closing" It was awesome.

@Justin Brown, after a lot of back and forth seller agreed under contract to give me 1200 at closing and I do all repairs. I rather pay someone to do a good job then have the seller put lipstick on the pig. Closing is set for the 27th of this month!

Thanks everyone for your input i really appreciate your help since I don’t have anybody to talk real estate with at home. You guys are awesome!

Sounds like you got a decent credit. Make sure you do the work. City has become intolerant of non-compliance and will tag your property "unfit for human habitation" if not completed within time frame allowed. 

Just closed on this property! Next up is to put one more under contract before New Years to complete my #bp90days 💪🏽

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