Cash Credit to Buyers in Lieu of Repairs is Win-Win!

Dear Sue,

I am in the process of buying a house. We just finished the home inspection. There was an electrical issue called reverse polarity and a couple of leaks. There’s also some sheetrock that needs to be patched.

My Realtor wants to submit a repair addendum asking the seller to make the repairs.

Honestly, I would much rather make the repairs myself. I figure that if I do the work it will get done the way that I want it to. Any ideas?

Repairing Randy

Dear Randy,

Your desire to complete the needed repairs yourself is not uncommon. Buyers often prefer to do the repair work because they can control the outcome by doing or overseeing the work.

Fortunately for you, it’s an easy fix.

Get a couple of written bids estimating the cost of the proposed work. Make sure that the estimates are “arms length” meaning that they are from objective parties. Have your Realtor submit a request for a buyer credit along with the written estimates.

If the estimated work is $700.00, request a $700.00 credit from the seller at close of escrow.

This strategy is actually cleaner and easier for both buyer and seller. The seller isn’t under pressure to get the work completed before the close of escrow nor does he have any future liability.

Giving homebuyers a cash credit in lieu of making repairs is a win-win!

Dear Sue,

I have been in escrow on a short sale for over eight months.

The lender, after all this time has finally approved the short sale. The lender wants the escrow to close right away. The buyer is paying cash and can close right away but I can’t! I need more time.

My agent says that asking for an extension from the lender can be risky. She says that it might delay our ability to close at all.

I think that the lender should be more considerate of my situation. I just don’t know what to do!

Frustrated Frank

Dear Frank

Congratulations on your short sale approval!

I would suggest that you close the escrow immediately and rent back from the buyer for a specified period of time. Make the rental period as short as possible. Your Realtor can negotiate it for you as well as complete the proper paper work.

Most rent backs cover the buyer’s expenses including the loan payment, taxes and insurance. Since your buyer is paying cash, the rent should be at fair market value.

I believe that closing the escrow on time is your best bet. May I be Frank? There is only one good escrow and that’s a closed escrow!

An immediate close and rent back can be a matter of good home dollars and sense!