How to get home seller to pay for repairs

DEAR BOB: We are in the process of buying an older home in agreat neighborhood with outstanding public schools. As you often suggest, weinsisted on a professional inspection contingency clause in our purchase offer.We also accompanied the inspector to discuss the problems he discovered. Twodefects that the seller did not disclose are: 1) the roof is leaking water intothe attic, and 2) the foundation is sinking slightly in one corner, probablydue to poor drainage, which can be corrected. But the roof will cost at least$12,000 to replace. How can we get the seller to pay for the repairs? –Josh R.

DEAR JOSH: Congratulations on including a professionalinspection contingency clause in your home purchase offer. Although the sellermade a good faith effort to disclose known defects, perhaps he was not aware ofthe roof leaks and the foundation problem.

Purchase Bob Bruss reports online.

The best approach is to reopen negotiations and ask theseller to give you a “repair credit” for the leaky roof and thefoundation repairs. This is better than asking the seller to install a new roofand fix the foundation. The reason is most sellers will hire the cheapestcontractors who might not do a quality job.

A repair credit usually doesn’t affect your mortgageeligibility amount or the appraised market value. If your seller refuses togive you a repair credit, you can always walk away.

In today’s slowing home sales market, you can be sure thelisting agent will help with negotiations. But don’t be unreasonable. It’s agood deal for both parties if the seller agrees to credit you with half thecost of a new roof.


DEAR BOB: My wife and I own a two-thirds interest in a nicehouse with a pool. The other one-third belongs to the occupant who is nottaking care of the property, is on food stamps, and is not likely to repay usor buy us out. How can we sell our interest in this house without a partitionlawsuit? Private investors suggest paying him off to get him out. They offeredus only a fraction of full-market value. –John L.

DEAR JOHN: You were very lucky to find anyone who would buya two-thirds interest in a house. Without a partition lawsuit to force the saleof the property, you can’t force the occupant to sell.

Just because the resident is “down-and-out”doesn’t mean he should be able to keep you from selling. I suggest you remindhim that if he sells, he will receive one-third of the net sales proceeds.

If I were an investor interested in buying that property, Iwould make you a very “low-ball offer.” After you accept and takingtitle to your two-thirds interest, I would bring a partition lawsuit to forcethe sale of the property at full market value, thus making a”quick-flip” profit. For more details, please consult a local realestate attorney.


DEAR BOB: We had a sales contract to sell our house. Thebuyer was supposed to pay a deposit into a trust account with the realty officerepresenting the buyer. We expected to close with no problem. But a few daysafter the scheduled closing date, the buyer’s agent told us the buyer is a”fraud” and passed forged checks for the deposit and the downpayment. The agent cannot locate the buyer. Does the buyer’s agency have anyobligation to us to pay the deposit, which was supposed to be in a trustaccount? –Charles S.

DEAR CHARLES: That dishonest buyer’s agent should bereported to both the state real estate commissioner (for possible licenserevocation) and to the local Association of Realtors (for discipline) due tobreach of fiduciary duty to you.

There is no valid excuse for not promptly telling you thebuyer’s good-faith earnest money deposit check bounced.

However, I would not bother suing the buyer’s agent becauseproving your loss might be difficult and costly. I suggest you move on.However, your listing agent should have been monitoring the situation soperhaps he or she should share the blame too.


DEAR BOB: I am thinking of selling my home to one of those”we buy houses” companies. They claim to buy “as-is.” Theyask the seller to inform them of any repairs needed, but they also say if theseller does not inform them of any necessary repairs, they presume repairs arenecessary anyway. This firm offered me a very low price. If accepted, they thenperform a “due diligence” inspection before the contract is final.Does the fact that they assume repairs are necessary and that they highlydiscount the sales price change the seller’s legal liability for repairs?–Mark P.

DEAR MARK: Most states now have laws and court decisions requiringhome sellers to disclose known defects of the residence in writing. Making an”as-is” home sale is not a method to avoid liability for undiscloseddefects of which you are aware.

If you sell to those professional buyers at a price heavilydiscounted from market value, you should insist on a written waiver in thesales contract that you have disclosed all known defects, and the buyer hasinvestigated and will not hold you liable for any latent (hidden) defects thatmight become evident later. For more details, please consult a local realestate attorney.


DEAR BOB: We recently purchased a beautiful waterfront homein the state of Washington. This will become our retirement home in threeyears, but we are reluctant to rent this home and are leaning towards having ahousesitter live in it until we move in. This individual is highly recommendedby our new neighbors. However, I read somewhere if we allow an individual tohouse-sit, we are granting “squatter’s rights.” Is that correct? Thisindividual would not pay rent but will pay the monthly expenses. –Jeanine W.

DEAR JEANINE: “Squatter’s rights” (legally calleda “tenancy-at-sufferance”) refers to occupancy without the owner’spermission. Obviously, your housesitter will occupy with your permission so youneed not worry about squatter’s rights.

Be sure to consult your insurance agent in Washington to becertain you have adequate insurance for this unusual situation, includingliability coverage in case the housesitter trips on a loose carpet, which couldbe considered negligence by you.

You need a written agreement with your housesitter so youcan remove him or her at your will without cause. I suggest you consult a realestate attorney located near the property.


DEAR BOB: I read in the AARP newsletter that InternalRevenue Code 121 will expire in 2007 but that it will be extended if Congresspasses President Bush’s 2007. Do you have any further information on thistopic? –Helen K.

DEAR HELEN: There is no such expiration date in InternalRevenue Code 121, which provides principal residence sale tax exemptions up to$250,000 for a qualified single home seller and up to $500,000 for a marriedcouple filing a joint tax return.

If there were such a provision in either IRC 121, orPresident Bush’s proposed 2007 budget, you can be sure the National Associationof Realtors (the nation’s largest trade association with over 1.2 millionmembers), the National Association of Home Builders, and other real estategroups will be extremely vocal to stop such an irrational tax law repeal.


DEAR BOB: I own a house that has been rented to tenants formany years. Now we want to use this as our primary residence and sell it after24 months. What documents should I have to prove to the Internal RevenueService this is indeed my primary residence so I can claim the $500,000exemption of Internal Revenue Code 121? –Deb S.

DEAR DEB: Just move in. Save your utility bills and otherevidence of principal residence occupancy. Be sure to file your income taxreturns from your new principal residence, change your car registration,driver’s license, bank accounts, etc. to your new address.

You mentioned “we.” If your spouse is not on thetitle, that’s all right as long as he also meets the 24 out of last 60 monthsbefore sale occupancy test. However, if your co-occupant is not your spouse, heor she must be on the title to claim their $250,000 principal residence saletax exemption. For more details, please consult your tax adviser.

The new Robert Bruss special report, “How to Sell YourHouse or Condo for Top Dollar With or Without a Real Estate Agent,” is nowavailable for $5 from Robert Bruss, 251 Park Road, Burlingame, CA 94010 or bycredit card at 1-800-736-1736 or instant Internet PDF delivery at Questions for this columnare welcome at either address.

(For more information on Bob Bruss publications, visit his
Real Estate Center

Copyright 2006 Inman News

Distributed by Inman News

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