The Easy Way . . . and the Hard Way
The Buyer’s inspection revealed a material defect in the home that the Seller doesn’t dispute.
Both parties want to stay in the deal.
What are their options?
Option #1: the Seller fixes the problem, prior to closing.
Here are the related steps:
One. Buyer and Seller negotiate an Amendment to the Purchase Agreement describing the work to be done ” typically, by a licensed contractor ” and further providing that, post-completion, the Buyer is to receive copies of the related invoice showing that it was paid in full. If the issue requires a re-test ” for example, radon remediation ” Seller is to provide Buyer with documentation that the re-test results are satisfactory.
Two. The Buyer checks out the reputation (or tries to) of the contractor hired by the Seller;
Three. The Buyer reviews the work performed, often as part of the walk-thru inspection just before closing. If there are any issues regarding workmanship, Buyer and Seller must negotiate a resolution prior to closing;
Four. The Buyer makes sure that any warranties covering the work can be assigned by the Seller to them;
Five. Prior to closing, the Buyer (or the title company representing them) obtains a lien waiver from the contractor who did the work (ensures that there are no unpaid invoices that could ultimately turn into a judgement against the home — and its new owner).
Option #2
Unless the issue represents a safety issue ” or the Buyer’s lender requires the repair prior to closing ” the Buyer and Seller can instead agree to reduce the purchase price.
Then, the Buyer hires their own contractor, post-closing.
Here are the required steps:
One. Buyer and Seller each get quotes estimating the repair cost.
Two. Buyer and Seller sign an Amendment to the Purchase Agreement reducing the sales price, usually by an average of the two quotes.
Three. Post-closing, the Buyer hires, oversees, and pays a contractor of their choosing to correct the issue. Any warranties associated with the work automatically cover them.
Now, which option seems simpler to you?
Me, too . . .
