As part of the sales process, Buyers typically hire inspectors to ascertain the condition of the property they intend to buy. At the conclusion of those inspections, there is usually some sort of request that the Seller repair or credit the Buyer for certain items of disrepair. However, there is much uncertainty among buyers, sellers, and agents themselves as to what constitutes a “reasonable” request for repair. Below are excerpts from an excellent article that sheds some light on what would be considered reasonable in negotiating a request for repair.
1. Use Qualified, Reasonable Inspectors
Research the inspectors used or that you plan to use to ensure their reports are thorough and accurate but sensible.
2. Focus on the Primary Systems
It is entirely realistic to ask that plumbing, electrical, HVAC, roof, foundation, and other primary systems be in safe operating condition. You need to be able to live without getting shocked, should have no leaks in the plumbing, be able to use all fixtures and appliances proficiently, and stay dry when it rains. The heater should safely heat (no CO emissions;) the air conditioner should cool; foundations should be sturdy and all windows and doors should open, close, and lock, and the like.
Some municipalities, like Malibu, have point-of-sale ordinances requiring that septic systems meet certain operating standards. If the region dictates specific conditions be met for the sale, the seller should be responsible for the remedy.
3. Ask that Pests and Resultant Damage Be Remedied
Whether termites, boring beetles, carpenter ants, wasps, rodents, or other damage-inducing pests, it is reasonable to ask that the instigators are eradicated and any resultant structural damage be repaired. This also applies to water-related fungus damage.
4. Ensure health and safety items are corrected
A buyer has the right to request that any item deemed to be a health and safety issue be rectified. Some areas, like Malibu, mandate that hot water tanks be secured with seismic straps, smoke, carbon monoxide detectors be installed, gas meters, and have auto-shutoff valves.
It is important to note, however, that there can be disagreement over what constitutes a fixable issue. As an example, an inspector may call out a door that swings out over steps as “unsafe.” However, since this is a part of the home as built, the buyer should not be asking that the home’s structure be changed, even if declared less than ideal.
5. Avoid asking for system upgrades
In most areas, it is understood that homes are sold with the applicable building codes of the day it was built or the day any permitted upgrades were constructed and signed off by the local building department.
As an example, older homes may have an electrical system that is no longer in compliance with current electrical codes. Homes prior to the mid-20th century did not require electrical systems to be grounded. As time progressed, increasing consumer protection advocates instituted better building codes.
Currents codes (IBC) now mandate ground-fault circuit interrupter (GFCI) and arc-fault circuit interrupter (AFCI) outlets. Although it would be good to have these in older homes, if they are not present at the time of sale, in most areas they are considered an upgrade.
Although it’s okay to ask the seller to ensure that the existing electrical system is working correctly for the date it was built, it is usually not acceptable to request that the electrical system be upgraded to current codes. While it may be reasonable to ask for GFCI outlets since the cost is relatively low, any buyer thinking that adding a GFCI outlet to an ungrounded system will remedy the grounding issue would be misinformed.
The same applies to other systems as well: You should not be asking sellers to upgrade galvanized pipes to copper or PEX, install new furnaces if the old ones are still working safely (even if they are old,) seismically retrofit foundations, replace single-pane windows with dual pane products, install insulation, provide a new roof when the old one is watertight, fix cracks in sidewalks, reverse grading, French drains and more.
Some inspectors add fuel to the fire by using comments such as “near the end of its useful life” (frequently seen for furnaces) or “recommend replacement.” Buyers need to understand that if the item in question is still working correctly, the seller should not be required to provide an upgrade.
6. Avoid Asking for Abatement
Older homes may have materials deemed hazardous, especially asbestos (ventilation or furnace ducting, acoustic ceiling texture, sheetrock mud, floor tiles, fireproofing materials, roofing, siding, some textured paints, and more) and lead-based paint. Buyers can order inspections to ascertain the levels and locations of such materials if they choose. However, it is generally accepted in most parts of the country that the seller will not be required to abate these items.
7. Avoid Asking for Cosmetic Changes
Expect the seller’s responses to be less than congenial when asked to make cosmetic changes to a home.
I’ve seen buyers insist that houses be repainted, carpets are replaced and wood floors be refinished.
On the extreme end, buyers have demanded that pools be removed, air conditioning be installed, extensive landscaping or hardscape be provided, and more. In 100 percent of the cases I have seen, these requests were not only refused, but they also alienated the seller in the process.
The goal of requests for repairs is to ensure that the home being bought is in safe, livable condition. While buyers have a right to ask for repairs, sellers also have the right to say “no.”
Buyers who produce a laundry list of non-critical items run the risk of alienating a seller and ending up with little or nothing. While it’s important to get the best possible terms for the buyer, there is often a fine line between reasonable and not.
Whether the Buyer is asking for actual repairs to be made or a credit or price reduction, I’ve learned from experience that the more realistic you keep the negotiations, the better the chances of win-win solutions.
Hopefully, this article helps provide some additional guidance on a sensitive subject that often raises issues in today’s real estate transactions.
About Mark S. Gruskin
Partner, Westside Estate Agency, LA’s premier luxury real estate firm.
My goal is to give every client insightful and intelligent advice, get them the best value possible, and serve professionally and with the utmost integrity. My office is conveniently located in the center of Malibu at the Country Mart right across from the Malibu Theater. Stop by and say hello!
If Malibu is where you live or would like to live, then give me a call, and let’s talk real estate!
About the Author
Carl Medford, A licensed General Contractor, co-owns The Next Stage, a professional staging company CEO of The Medford Real Estate Team, Carl ranks with the top few Realtors® in Alameda County. He’s contributed to Trulia’s Pro Blog and quoted in the Washington Post, LA Times, San Francisco’s SFGate, and CRS’s Residential Specialist Magazine. He writes a weekly real estate column in East Bay newspapers and is a sought-after speaker at real estate events and MLSs. https://medfordteam.com/