Is a buyer credit or seller repair better?

One of the most important negotiations in a home purchase centers around issues discovered by the home inspector.  Once you, as a buyer, have decided which things you’d like repaired, you need to decide if you’re asking the seller for a credit or to make the repair.  There are pros and cons to both approaches.  The advantage to taking the seller credit is that you can choose whomever you like to do the work (once you’ve taken possession) and you can supervise the work. The risk is that whatever amount you and the seller agree to for the cash credit toward that repair may or may not be enough to cover the cost of it. There are two advantages to having the seller make the repairs: work is completed before you move in, so you don’t have the headache of having to manage it (time off of work, messy/noisy workmen, etc.) and you don’t risk cost overruns.  However, lots of people fear that the seller, in order to save money, may not have the job done to the same standard you would, since it’s going to be your home.

IF you decide to have the seller make the repair, my recommendation is to be very clear on the addendum about how the work to be done:

1. Be as specific as possible–either use the inspector’s language from the inspection report, or have a qualified contractor provide a written estimate describing exactly what needs to be done and provide and reference that estimate in the addendum.
2. Write in that all work must be done by a qualified contractor (or, if it’s appropriate, a “qualified, licensed, insured: contractor.
3. Include verbiage that indicates that you may inspect the work prior to closing and that it must satisfy you.
4. Be sure to lay out what happens if you are not satisfied with the work.

Remember, in Pennsylvania, nothing survives closing.  That means that, once you take title, if you then determine that a seller repair was shoddy, while you can hope that the contractor who did the work (for the seller, not for you) will stand by it and make it right, you can’t force the seller to do anything without having to sue him.  So the lesson is: be very careful and think things through when negotiation inspection repairs if you decide to have the seller take care of them.