Trust but verify when it comes to repairs

By Carrie Colby

You made it through the bidding war. Your offer was accepted, and you’re finally under contract on a home you worked hard to win in a market that left little room for error.

Now comes the inspection – and if you’re not prepared for what it uncovers, this is where deals can quietly fall apart.

A home inspection doesn’t produce a simple pass-or-fail result. Instead, the inspector provides a detailed report on the property’s condition, and the buyer decides how to respond. When the report reveals serious problems, though, the practical effect can feel a lot like failure.

Depending on the severity of the issues, your financing, and your negotiating leverage, you may be able to walk away with your deposit intact, renegotiate the price, request repairs, or move forward with the purchase as-is.

How the Inspection Contingency Protects You

Your ability to respond to a bad inspection report comes from the inspection contingency in your purchase agreement. This clause makes the sale conditional on your acceptance of the inspection results. Without it, you could still be obligated to buy the property regardless of what the inspector finds.

The contingency also establishes a deadline – typically seven to 10 days after the seller accepts your offer. During that period, you must complete the inspection, review the report, and formally notify the seller if you want repairs, credits, a price reduction, or to cancel the contract.

Missing that deadline can create serious problems. In most contracts, once the contingency period expires without action, the property is considered accepted in its current condition. At that point, your negotiating leverage largely disappears, and backing out of the deal could mean losing your earnest money deposit.

Extending the Contingency Period

Sometimes the original timeline isn’t enough. A specialty inspection may be delayed, or the inspector may recommend further evaluation by a structural engineer, electrician, or roofer.

In those situations, your agent can request an extension through a written addendum. The seller must agree to the extension, so requests are more likely to succeed when they’re tied to a specific unresolved issue rather than general hesitation.

Your Options After a Troubling Inspection Report

Once you receive the inspection report, you generally have four options. The best path depends on the seriousness of the issues, the estimated repair costs, the seller’s motivation, and whether your lender requires repairs before closing.

Walk Away From the Deal

If the inspection uncovers problems that are too expensive, risky, or disruptive, you can cancel the contract and recover your earnest money deposit — provided you act within the contingency period.

This is exactly why inspection contingencies exist. Major structural damage, extensive water intrusion, mold, or unsafe electrical systems can turn what appeared to be a good purchase into an expensive liability.

Buyers sometimes hesitate because they’re emotionally invested in the home. But walking away from a property with overwhelming repair issues can be one of the smartest financial decisions you make. Spending a few hundred dollars on an inspection is far cheaper than inheriting a five-figure repair bill after closing.

Request Repairs

You can ask the seller to repair specific problems before closing. Your agent will typically submit a formal repair request based on the inspection findings, and the seller can agree, reject the request, or negotiate.

This approach works best for clearly defined issues with straightforward solutions – replacing a failed water heater, repairing a roof leak, or correcting electrical code violations.

Vague requests often create problems. Asking a seller to “address basement moisture,” for example, may result in the cheapest temporary fix rather than a lasting solution. The more specific the request the better your chances of getting meaningful repairs.

Ask for a Credit or Price Reduction

Many buyers prefer to handle repairs themselves after closing rather than rely on the seller’s contractors. In that case, you can negotiate either a seller credit or a purchase price reduction.

A price reduction lowers the amount you borrow, which slightly reduces both your monthly mortgage payment and your long-term interest costs.

A seller credit, by contrast, reduces the amount of cash you need at closing. That can be especially valuable if you expect to begin repairs immediately after moving in.

There are limits, however. Mortgage lenders cap how much a seller can contribute toward closing costs, and the allowable amount depends on the loan type and down payment size. If repair costs exceed those limits, a price reduction may be the more practical option.

Credits also cannot solve an appraisal gap. If the property appraises for below the contract price, reducing the purchase price is generally the only way to address the difference.

Accept the Property As-Is

Sometimes the inspection findings are relatively minor, the home was already priced to reflect its condition, or the market is competitive enough that aggressive negotiation could jeopardize the deal.

In those cases, buyers may choose to waive the inspection contingency and move forward without requesting concessions.

Before doing so, make sure you understand the true cost of ownership. Obtain contractor estimates whenever possible and confirm that you can comfortably afford both the mortgage and the necessary repairs after closing.

Verifying Completed Repairs 

When the seller agrees to make repairs, trust but verify. The repair amendment in your contract should specify that the work be completed by licensed contractors, but you still need to confirm the quality before closing.

A re-inspection by your original home inspector is usually the most reliable approach. The inspector returns to verify that the agreed-upon items were actually repaired and completed properly. Re-inspections are typically quicker and less expensive than the original inspection, often costing between $100 and $200.

You should also request documentation from the seller, including:

* Detailed invoices showing labor and materials
* Before-and-after photos
* Contractor receipts confirming payment
* Copies of permits and final inspection approvals for any permitted work

Permitted work that never received a final inspection is a red flag. It means no municipal inspector confirmed that the work met local building code requirements.

Carrie Colby is a Broker with Allied Real Estate, 909 Roosevelt Trail in Windham. She can be reached at 207-232-5497. <