Leave a Message

Thank you for your message. We will be in touch with you shortly.

Repairs, Credits, & Price Reductions

June 23, 2021

Repairs, Credits, & Price Reductions
More often than not, a home inspection leads to findings that merit repairs. A buyer and seller have a few options when negotiating a resolution. Below is an explanation of the benefits of each option.
 
A reduction in price only helps a cash buyer. Since most buyers are using financing to fund the vast majority of their purchase this doesn’t come into play too often. For a buyer using a mortgage, the reduction in price will only put a portion of the money back in the buyer’s pocket as the majority of the purchase is financed. Reducing the price would simply mean that the buyer would use their own cash to make the repairs. A lower price also means a lower tax basis so a cash buyer gets this ancillary benefit as well. The cash buyer can then higher anyone they choose to complete the work after closing.
 
Taking a credit comes in the form of credit for closing costs. A buyer uses the seller’s credit to fund their closing costs, and keeps their own money in their own pocket. This credit cannot exceed a buyer’s total closing costs. This credit allows for the buyer to hire anyone they choose to complete the work after closing. One downside could be the work costing more than anticipated. On the flip side, it’s possible the actual work could cost less than anticipated.
 
Asking for a repair by a qualified professional is always a good option. Being very specific with the description of the work is very important in this situation. We don’t want any gray area. A seller might not complete the repair how the buyer wanted it completed so there can be a risk. Lining up repairs can take time so repairs could delay the close of escrow. You’ll also want records and receipts of any work that the seller completed prior to the close of escrow.
 
Any combination of these resolutions will work. It’s a matter of trusting the quality of repairs, the timing, and the amount of money a buyer is eligible for when dealing with credits. Working with a savvy Realtor, like the ones at Market Real Estate, will mean you’ll get the best possible outcome when dealing with repairs.

Recent Blog Posts

Stay up to date on the latest real estate trends.

Market Real Estate Update: New Listings, Pending Sales, and Community Giving

November 8, 2024

Explore our latest listings, including stunning homes with panoramic views and great amenities. Plus, join our 2024 Food Drive and give back to the community. Find you… Read more

Just Listed: Stunning Vista Del Cerro Home Back on the Market – A Prime Real Estate Opportunity Before Thanksgiving

October 24, 2024

Hot listing back on the market! 7770 Forrestal Road in Vista Del Cerro is available again. Perfect for families, this home offers stunning views and great outdoor spac… Read more

San Diego Real Estate Spotlight: Market Trends, Pending Sales, and Expert Insights

October 16, 2024

Navigating San Diego's Real Estate Market: Your Best Opportunities Right Now

August 19, 2024

Unlocking Real Estate Opportunities: VA Mortgages and Today's Market Trends

August 19, 2024

The DST is Ideal For Aging Investment Property Owners

February 15, 2024

Perch Wealth, Featured in BIZNOW, explains DSTs

Mortgage Rates, Home Values & The Rental Market

September 28, 2022

Mortgage interest rates play a huge role in home values. These rates are now at 2002 levels, up sharply from all time lows in 2021. The average 30 year fixed mortgage … Read more

Out of State Investing

April 7, 2022

Let’s face it… A lot of real estate investors are priced out of California, and prices are continuing to climb. Here is an example. In 2012 an investor could purchase … Read more

Out of State Investing

April 6, 2022

Let’s face it… A lot of real estate investors are priced out of California, and prices are continuing to climb.

Let's Talk

You’ve got questions and we can’t wait to answer them.