Serving Orange County, CA
Call Now 949.757.0707

Negotiating Repairs in an Orange County Home Sale

real estate attorneyAlmost every home sale in Orange County involves a home inspection, and almost every home inspection identifies some improvements that are needed on the property. Buyers and sellers have wide latitude to negotiate these repairs. It is important that both sides be flexible, and not allow an inexpensive repair to undo an otherwise satisfactory sales transaction. It is also important to understand the roles that a third party (such as a building inspector or lender) can play in the repair negotiation process.

What Repairs Are Required Before a Home Sale Can Be Completed?

Repairs to a property in escrow can generally be classified in one of three ways: those which are required before a sale can be completed, those which are not required, and those which may or may not be completed before the sale (depending upon the needs of the buyer and seller). Realtor.com identifies required repairs as those which affect the building structure, building code violations, or safety issues.

Such repairs are required because finance companies and home lenders will often refuse to release funds for the purchase of a home which is unsafe or violates local building codes. These repairs carry the potential to end a sales transaction if they are not remedied appropriately. Because of this, the responsibility for such repairs generally falls to the seller. The seller may either make the repairs or negotiate a credit to the purchase price in order to enable the buyer to make the repairs. So long as the lender agrees to finance the sale under those conditions, the transaction can still be completed.

Repairs which are not required before a sale can be completed will generally fall under the category of normal wear and tear, or simple cosmetic fixes. It is important to carefully address such repairs in the language of a sales contract. If contractual language is too broad, a buyer can request a litany of cosmetic repairs from the seller (and delay the closing date as a result). Contract language which is too narrow may restrict repairs to only those which are necessary to secure financing or meet local building codes. It is therefore important that both buyer and seller carefully identify the types of repairs which are subject to the terms and conditions of a sales contract.

Somewhere between those repairs which are strictly cosmetic, and those which are required to comply with the law, are those which can be negotiated by the buyer and seller. This ambiguity is not necessarily a bad thing. With room to negotiate, the parties can reach a solution which addresses repair issues without undoing the whole transaction. A buyer wanting a lower sales price may be able to negotiate a purchase price abatement instead of demanding that repairs be completed. A handy homeowner who wants to sell for top dollar can easily offer to make discretionary repairs him- or herself, thus solving the repair issues and protecting the home value.

A Newport Beach real estate attorney can help buyers and sellers identify and resolve repair issues in order to ensure successful real estate transactions.

Category: Posts

Dan Carlton and his team are dedicated, down-to-earth, compassionate personal injury attorneys committed to helping victims of traffic accidents, personal injuries, dog bites and more. Serving Los Angeles and the entire Orange County area, including Anaheim, Tustin, Irvine, Garden Grove and Santa Ana, for over 40 years, we have handled thousands of cases.

Daniel C. Carlton