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What is seller fails to follow through on agreed home inspection repairs?

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These days, most buyers will complete a home inspection by a licensed inspector. Following the actual inspections, the buyer's agent will submit the documentation to notate any repairs that the buyer is requesting to the listing agent. This can often turn into a round of negotiations as both parties evaluate the "reasonableness" of the requests and whether they repairs are within the confines of the sales contract.

This process can go really smoothly when both the buyer and sellers are closely aligned with expectations. However, it is not unusual for there to be a gap between what the buyer is expecting and what the seller is willing to do. This is influenced by how the purchase details came together (purchase price, etc) and how both parties feel about that outcome. The seller is not required to address all items that may show up in an inspection report. In fact, inspection reports often contain a mix of cosmetic items, systems/equipment items and general maintenance items to provide a thorough outline of the homes condition so that the buyers can make informed decisions. This does NOT mean that the sellers need to address everything. It is important for the buyers to remember that they are purchasing a used home.

As such, the buyer and seller may go back and forth several times before reaching an agreement. However, once both parties have agreed to the terms, the seller is contractually responsible for completing all repairs as negotiated. So, what happens if the seller fails to complete the home repairs that were agreed to?

It's important to remember that both parties are typically both interested in having the deal close. With that in mind, the buyer should proceed carefully but know that the contract will side with him if the seller hasn't complied with the contract by failing to complete inspection repairs if they were agreed to. Assuming the walk-through was scheduled within reasonable proximity to closing and not too far in advance, the repairs should be completed by the seller prior to the walk-through.

As part of the final walk-thru, the buyer has the opportunity to scrutinize the repairs. If the repairs are not completed as contractually agreed upon, the buyer has five options:

1. Postpone - Postpone closing until repairs are completed. Buyers often times have their belongings loaded in a moving truck and don't want to delay the closing. If this option is chosen, the buyer and seller will need to extend the closing date with an executed addendum.

2. Escrow - Request the seller put funds in an escrow account until the repairs are completed. This is less desirable for the seller, but allows all parties to close as planned. If the seller doesn't comply by a date agreeable to both parties, the buyer is issued the money to make the repairs himself. If the seller completes the repairs, the escrow money is returned to the seller. Please know that some counties also have a practice of escrowing a certain percent of the anticipated cost, which is typically more than the projected cost. In Naples, the default is 200% of the estimated cost.

3. Credit - Request a credit from seller to complete the repairs. This can be risky as the actual costs may turn out be higher than the buyer anticipates when they go to make the repairs, but it does allow both parties to complete the sale on time.

4. Re-negotiate - Re-negotiate repairs. While this is not favorable for the buyer, it may become necessary to proceed with the home purchase.

5. Cancel - Cancel home sale for non-performance. Obviously, this is the least desirable option for both parties. It may be more desirable to re-negotiate the terms of the repairs than choose this option. However, a lot depends on the dollar amounts involved. If this occurs, engaging an attorney is highly recommended to help ensure that the buyer will receive their earnest money back. The buyer may also have grounds to file suit against the seller for breach of contract.

If you get to the final walk-thru and the repairs haven't been completed, take a deep breath and ask your real estate agent the best course of action. The agent's responsibility is to get all parties to agree upon a reasonable solution. Don't have a knee-jerk reaction that could cost you the home of your dreams. After all, your primary goal is typically to complete the sale.


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