You’re in escrow on your new house. You get your inspections done and there are a bunch of things that need to be fixed. Nothing major, just fixes you don’t want to get stuck doing yourself. The seller has to fix them right? Wrong!
Homes in California are sold “as is” which means the home is sold in its present physical condition. In Los Angeles County and Ventura County, the seller is only required to do three things:
- Strap the water heater for earthquake safety.
- Install proper smoke detectors.
- Install carbon monoxide detectors.
That’s it. Everything else is negotiable. (L.A. City has additional requirements)
In practice, sellers will usually fix broken and/or safety items, but they are not required. But you are also not required to buy the house. If buyer and seller can’t come to an agreement, the buyer can cancel during the contingency period (usually the first 17 days) and get all the deposit money back. The only money you would lose would be any money you spent on inspections and the appraisal (if it’s been done already).
You MUST Perform Your Inspections
Ok, you’re not required to by law, but if you’re my client you are. It’s one of the most important initial steps you’ll perform. It’s up to you to order any and all inspections you’d like, it’s just at your expense. (Read: Which Home Inspections Should I Get)
Most buyers will minimally get a general inspection. A general inspector will come out to the house for about 3-4 hours and he will test all the systems of the house. Think of him as your general doctor. He’ll run the a/c, open the electrical panel, check the water heater, etc. At the end, he’ll walk you through any issues and you’ll receive about a 50 page report going through each room and system of the house.
Your general inspector may suggest you get more specialized inspections like sewer, roof, and chimney or you may decide to order them on your own. It’s completely up to you.
With the help of your agent, you’ll take the reports and you’ll write up a Request for Repair. Technically the seller isn’t required to respond to your request since homes are sold as-is, but if the seller wants to close the sale, you’ll get a response.
Pro Tip: Be reasonable with your requests and the seller will be reasonable too.
What do I mean by reasonable? Don’t ask for everything. I’ve had buyers make the mistake of asking for a laundry list of items. That usually causes a knee-jerk reaction from the seller and they become less accommodating to making any repairs at all.
Strategy To Get Your Repairs Accepted
Here’s what I suggest, go through the report and pull out every item you would like to have repaired. If you have a list of a ton of items, try and whittle it down to your top 10 or so. Give more weight to safety and broken items.
If you’re lucky and there aren’t many issues in the report, throw in some other borderline items and see how they respond. Working items that are just old – like an old a/c for instance – are highly unlikely to get replaced, so don’t bother asking.
Pro Tip: The seller will typically provide you with a 1 year home warranty policy that will cover older appliances if they die on you.
If there’s a big ticket item you want a credit for like money towards a roof or chimney repair, you may want to scale down some of your other requests to the most important. That keeps the focus on the credit. If there’s a long list of little items along with a big credit request, the seller may feel justified agreeing to the long list and refusing the credit.
During this negotiation, other factors come into play too. If there were 10 offers on the house and the seller has backup offers, they are much less likely to do a whole lot. However if it took 6 months to find a buyer, chances are they aren’t going to risk losing you over a couple thousand dollars.
Also, if you know the seller is in escrow on a new home, you can be a little more aggressive in what you ask for. The last thing the seller wants is to lose you as the buyer and then have to cancel on their new house.
Barring some major issue like a cracked slab or collapsing roof, it’s not very common for a sale to fall apart due to the inspection. The best strategy is for both sides to be empathetic towards one another. Chances are you’ll be on the other side one day and you’ll appreciate the other’s position.