How to Handle Property Repairs by Seller after Closing

Question

I represent the Buyer in a transaction.  We just completed the final walk-through and there are several items in the home that have not been repaired to the Buyer’s satisfaction.

My Buyer has to close today or her rate lock with her lender will expire and my Buyer has the movers and several friends lined up to help her move this afternoon.

What should we do to ensure all repairs are properly made by Seller after closing?

Answer

Typically, it is better to push back closing and wait for the Seller to complete the repair list to Buyer’s satisfaction before moving forward with closing.

But since that does not appear to be an option in this situation, the following might be helpful:

  1.  Have a written agreement prepared to be signed by and between Buyer and Seller;
  2.  In the written agreement:
  • State specifically all of the items that need to be repaired by Seller;
  • State specifically all of the items that need to be repaired by Seller;
  • Provide a timeframe for the Seller to complete the repairs;
    • i.e. 7 to 10 calendar days is usually sufficient;
  • Require that all repairs must be approved by Buyer within the aforementioned timeframe in order for Seller to be deemed compliant with the repair agreement;
  • Provide a damages provision adverse to Seller;
    • Essentially, this provision states that if Seller does not complete the repairs within the timeframe agreed upon by the Buyer and Seller that a certain amount of money will be disbursed to Buyer so Buyer can complete the repairs and also to compensate Buyer for any inconvenience experienced;
  • Require that all repairs are to be completed by a licensed and insured contractor;

Regarding the money outlined in the damages provision, it is highly recommended that Buyer require Seller to deposit this amount with an Escrow Officer.

If Seller doesn’t comply with the Repair Agreement, it will be much easier for Buyer to recover the monetary damages from an Escrow Officer than the Seller.

There are a few other considerations that need to be included in the above recommended Repair Agreement, but we can’t give away all of our secrets here at Tuten Title!!

One of the benefits of a Buyer choosing Tuten Title to handle their closing is we have a significant amount of experience preparing these Repair Agreements for the Buyer and holding money in escrow for the parties.