Don’t Lose the Sale Over Repairs

Real estate agents call negotiating repairs the second round of negotiations. When you are negotiating the original agreement, the balance of power is usually more equal between the buyer and seller, depending on the market and the motivation of the parties. After an agreement is reached, the seller’s mindset shifts from a position of questioning the original deal to supporting the completion of the agreement. As the seller releases his emotional attachment to the home and makes purchases and plans to move, the seller’s commitment to the completion of the deal strengthens.

On the other side of the transaction, the buyer frequently gets a case of “buyer’s remorse,” wondering if she did the right thing and whether the price is too high. So the buyer’s commitment to the sale decreases and her ability to walk away increases. In most states, if the sellers do all the repairs the contract goes forward, but if they refuse to do even one item, the buyer has a chance to cancel the agreement. If a sale falls through, the seller may have to disclose all the items that the inspection report calls out as problems. Also, when the home appears back on the market, it is frequently treated as damaged goods by the other real estate agents. These are some of the reasons that shift the dynamics of the negotiations so that the seller is at a disadvantage when negotiating repairs.

This second round of negotiations is the most frustrating for real estate agents, as they are not putting a deal together, but holding on to one. Also, spending your time arguing over the quality of the splash blocks under the downspouts is not a high dollar per hour job. You do not want to gloss over any item that may be a repair issue, as full disclosure is necessary, but you do not want to make a mountain out of a mole hill. If you have a team with a closing coordinator to handle the issues from the signing of the contract to the closing of the sale, you may want to teach them how to negotiate the repair issues

For Sellers

In the book, Create A Great Deal, the items you can do for a seller are discussed. An inspection before putting the home on the market can eliminate repair issues, or it can give you a disclosure disaster. You need to know when to do it and when to avoid it.

How about telling the buyer the home is sold “as is”? Will that eliminate the repair issues? It might, but it might eliminate the entire sale. You need to know how to use the “as is” clause. You also need to know how to prepare your seller for the buyers asking for repairs in spite of the ‘as is” clause.

Can you workout a personal agreement with the other agent so that the seller will give them a low price if they will not ask for repairs? Find out the problems with these understandings.

Remember Nancy Regan, you can “just say no”.

For Buyers

Do you know how to set reasonable expectations for your buyers? Can you explain the difference between the standards that inspectors have to follow and the requirements for repairs in your contract? If you cannot, you are going to lose all your hard work when the deal falls apart over an unnecessary repair dispute.

Do you know how to make your repair request sound smaller and more reasonable? If you can have the seller’s reaction be favorable, you will not go through protracted arguments.

When do you just let certain repairs go? If you can explain to your buyer the benefits of being reasonable at the repair stage, so that they can get benefits at a later stage, more of your sales will close, and close more smoothly.

For the Inspector

What can you do to make the inspector work with the buyers and the sellers, while still having full disclosure of all the issues with the property? How can you help the inspector explain the situation completely, without making a mountain out of a mole hill? A practical approach to leading the discussion will make all the difference in the reaction of the buyers and sellers to the items found by the inspector

How to Stop Losing Time and Deals Over Repair Issues

I have not had every repair issue possible come up over the last twenty nine years of selling real estate, just the vast majority of them. I would like to share what I have learned, so that your sales will close more often and more smoothly. Just click here and you can pre-order my book Create A Great Deal, The Art of Real Estate Negotiating so you won’t have to make all the mistakes I made.  If you would like to continue your education, you can click here to join the Real Estate Negotiating Institute, where we can discuss repair issues in detail.

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  1. Tim, we need your book asap. Hopefully, the entire MLS membership will get educated! And we will glide toward the closing table without all the hassle of inspection repair disagreements.

  2. Thank you. The reason I wrote it is to try to improve the experience of buyers and sellers and improve the lives of Realtors. Thank you for the comment.

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