How To Handle Repairs When Selling Your Home Without Breaching Your Contract
September 4th, 2008 Categories: Home Inspections, Selling a Home
The solution to the headline I just wrote is simple. Do what the binding agreement you just signed, called a real estate contract, says you will do. If you are a seller, make all the necessary repairs. If you are a buyer, only ask that necessary repairs be made. More on what a necessary repair is in a minute.
The North Carolina standard Offer to Purchase and Contract is really a pretty fair document. It is a standard contract that was created jointly by the NC Bar Association and the NC Association of Realtors. Neither of these organizations have any reason to favor either sellers or buyers, one over the other. It was written with the goal of allowing a buyer and a seller to transfer title to a property without harming one another. Plain and simple.
There is specific language in the contract that describes how the inspection process shall proceed, what rights each party has, and sets time and monetary limits on the repair process. There is even an easy to read list of what items shall be considered for repair. Basically the main systems of the house.
There is even a test of when an item on the list can be considered a repair item. The contract states that all items on the list “shall be performing the function for which intended and shall not be in need of immediate repair”. Any item on the list which fails this test is termed a “necessary repair”.
Sellers need to make any and all necessary repairs. This is what they agreed to when they signed the binding contract. And buyers do not need to request any repairs that are not necessary repairs. This is what they agreed to when they signed the binding contract. And both agents need to advise their clients, in the most clear way possible, to honor the agreements they both made in good faith.
Believe it or not, this seemingly simple process is complicated by both parties far more often than it should be. And I lay the blame for that, most of the time, at the feet of their real estate agents.
I actually had an agent, representing the seller of a home my buyer and I had put under contract, tell me that she advised her seller not to make any repairs because my buyer did not pay full price. What was she talking about? The contract the seller signed committed the seller to make all necessary repairs, without regard to the selling price. This agent was advising her sellers to purposefully breach an agreement they had made in good faith. Ethics anyone?
By the way. You probably shouldn’t call me to list your house if you want an agent who can help you figure out a way to wiggle out of contractual agreements you have made. In that case, I’m just not your guy. Now if you want someone who will explain in plain English exactly what your responsibilities are, and advise you on what you are responsible for repairing, and what you are not responsible for repairing, then maybe we would be a good fit.
The bottom line is to read very carefully any contract that you are signing. Another good thing about the standard NC real estate contract is that because it is standardized, and because all real estate agents receive extensive training on how to understand the terms and conditions it contains, there is no need to hire an attorney when making an offer. A good fiduciary real estate agent will take all the time required to thoroughly explain the contract to you prior to making an offer.
