To issue a buyer credit? Or not to issue a buyer credit?
No, you won’t find this in Shakespeare – but you’re sure to encounter this dilemma during the home sale.
And while each transaction is unique (the home, agents, buyers, and sellers), the decision, in many cases, comes down to convenience:
For sellers: the convenience of washing their hands of the repair responsibilities and moving on (even if they are potentially overpaying).
For buyers: the convenience of handing the repairs in their own time and to their liking.
For agents: the convenience of moving the deal forward without further complications.
But, if you’ve ever eaten gas station sushi, you know that convenience can have its consequences – and buyer credits are no different.
Here are 3 ways a buyer credit can lead to a slippery slope of buyer pain.
1. The buyer has to do the repairs.
Picking out the perfect decor, watching a movie in your new home theater, entertaining friends on your deck on a sunny Saturday afternoon – these are the kinds of things that new homeowners look forward to when buying a home.
Coordinating and managing home inspection repairs? Not as high on the enjoyment index.
Even with credit in hand, nothing kills the new home honeymoon phase more than a punch list of repairs that you need to complete – especially when the seller could have taken care of them prior to closing!
2. The repairs don’t get done immediately.
Even without inspection repairs, there’s always work to be done upon moving into a new home. Cleaning, landscaping, painting, making updates to light fixtures – making a home your own.
These tasks, when combined with the rigors of everyday life, make it easy to forget about those pesky repairs – especially if they’re inconspicuous (for example, in a crawl space).
The defects are out of sight, they’re out of mind, and the repairs, well…
3. The repairs don’t get done.
Over time, people get used to things they don’t like (like your spouse’s snoring). The more time that passes, the less likely it is that the homeowners will think to remedy the defects found in due diligence.
And, after buying that new living room set and 8K TV, the money once earmarked for the repairs is long gone.
This is the perfect storm for big problems down the road.
The defects will remain, likely worsen, and potentially lead to new issues that are more complicated (and costly) to repair.
And, down the road when it’s time to list, there will be no getting around the repairs. The defects are documented, they’re material in nature, and they’re going to impact the sale.
The best course of action?
For the buyer, the simplest option is to have the seller complete the repairs BEFORE the deal is done. This way, they can enjoy their new home immediately knowing that all issues are resolved (confirmed by a re-inspection before closing).
And if a buyer credit is issued, here are two things to remember:
- Don’t wait! Get the repairs done immediately not only to ensure the home is in good health today, but to prevent the pain of larger, more costly repairs in the future.
- No guessing! Make sure your credit is based on a quote from contractors who are available to do the job and will stand by their price post-closing. That way, you won’t get caught paying more for repairs than you were credited!
Do these things and you’ll avoid the slippery slope that has befallen many a homeowner.
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