Lots of Third Parties, Oversight
Test your knowledge of residential real estate, and answer the following question:
Which of the following have the power to force a home seller to make a repair prior to closing?
A. The Buyer;
B. The Buyer’s home insurance carrier;
C. The local municipality;
D. The Buyer’s lender.
Answer: all but “A.”
If that seems puzzling, the explanation is that Buyers may negotiate for Sellers to fix things prior to closing.
But, they can’t unilaterally require anything (the Seller can always say “no,” albeit at the risk of losing the sale).
Forcing the Seller’s Hand
Meanwhile, lenders, insurers, and cities — at least ones that have point-of-sale inspections — can all require pre-closing repairs and/or updates as a condition for lending/insuring/issuing a Certificate of Compliance (needed to transfer title).
Most common issues: worn-out roofs, old electric service panels (fuses instead of circuit breakers), any dangerous wiring, and suspect furnaces that fail inspection.
In general, cities focus on safety-related items, while lenders focus on anything that may impair their collateral (a fancy name for the house, should the lender get it back in a foreclosure).
**That would be the business Golden Rule (“whoever has it” — or is insuring it), not the biblical one (“do unto others . . .”).
