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Updated over 6 years ago, 07/17/2018
How do I formally ask the seller to pay for or credit repairs?
I just received my inspection report today a few hours after the inspection and am within my inspection contingency time period. Unfortunately, I was surprised to learn of potentially expensive issues with the foundation shifting. My inspector threw out a ballpark guess that it could be roughly 10k to repair it. This property is not listed on the MLS so I am not working with an agent. Now my question is how do I go about formally asking the seller to make the repair? The wording of the contract says "OFFER TO RENEGOTIATE with SELLER by notifying SELLER on the Resolution of Unacceptable Conditions within the Inspection Period." This is my first property purchase so I am unsure if there is a specific type of form that is usually filled out or if this can be asked in a less formal way. Any advice on this (or foundation issues in general) would be greatly appreciated. I honestly don't know much about foundation issues other than that they typically are expensive. Thanks!
You ask them first if they’ll repair it on their own before closing. If they say yes, then you get a contract amendment that says that.
Then after it’s done you send your inspector back to make sure it was done right.
If they say no they won’t repair it before closing, ask for a sellers credit for around 10k. Depending on the financing (if any) and sales price your lender may have issue with this. Conventional financing usually limits seller credit to 2 percent or less of sales price.
The other option is to just knock 10k off the purchase price but then you need 10k or more in cash lying around.
The other option is to split the cost with the seller. I’ve done combinations of multiple of these suggestions.
Anything agreed to, always get in writing after
@Caleb Heimsoth Thanks for the thorough reply! So am I correct in my understanding that at first I can just reach out to the seller via email or text? And then from there, we draft an official amendment if we end up reaching an agreement?
For the sellers credit limitation, it sounds like that might not work well for me if my lender follows similar guidelines... My financing is an FHA loan on a $136,000 purchase price.
@Bret Kingcade you said you don’t have an agent does the seller have an agent? I’m assuming no. If that’s true then yeah just reach out to them directly. If they have an agent go through the agent.
Knowing FHA is usually more stringent then conventional does this issue make it not qualify for fha? I'm going through a conventional loan right now and they made the seller remove security bars so a foundation issue may make it not financAble. That'll be in your appraisal report if that's the case.
I’m this case the seller credit will likely be limited so you’re best bet may just be to ask them to know it off the purchase price. They may say no or go for it.
I suggest having the "foundation issue" inspected by a GC or a Structural Engineer. A home inspector is always going to give you a worst-case scenario opinion of things, since they need to cover their asses. Often times "foundation issues" are just settlement cracks that aren't a big deal.
(also your inspector shouldn't be estimating renovation costs)
Yes, at least in Mass- inspectors can't give ballpark or quotes for how much things cost to fix
@Joe Norman He really only threw out a number guess because I asked him to. The pics below are what is shown in the report. I honestly have no idea what the level of severity is at this point.
@Caleb Heimsoth That's a good question... I haven't had my appraisal yet. The FHA guidelines do mention the foundation has to be "safe" but it is pretty vague about it. If this is a big item like I worry, I'd probably have to ask him to make the repairs before closing. If he says no, I'd have to just walk away at that point.
One more thing...now I am wondering what I should be doing first:
1) Reach out to the seller first to get a feel for if he'll pay for the repair to see if he just immediately shoots me down on it.
or
2) Contact a structural engineer first to get the ball rolling so I can have a more informed discussion with the seller on what needs to be done
I'm just wondering if I should be spending more money on this property before getting a better idea of whether or not this deal can go through. My inspection period ends this Friday. Thanks for the help everyone!
Bret Kingcade you’re over thinking this by a lot lol.
My vote is definitely do option 1. If he says no or won’t split the cost or cut the price then you can decide what to do next.
Don’t spend money on a engineer when you don’t know what the seller would say.
Some foundation issues aren’t always a big deal. (I’m not saying this isn’t an issue because it looks like it could be) But for example a crack in a concrete slab that’s 60-70 years old isn’t necessarily a big deal.
Same goes for minor plaster cracks and so on.
So I am in an almost Identical situation except I do have an agent that is sort of a mediator between the seller and I. I just had my inspection and we found similar issues possibly more sever than yours. My inspector gave me a ballpark of 7500-10,000 in foundation repair. He advised me that a lot of contractors won't warranty their work unless they basically brace or modify the entire foundation. That is why it could be up to 10,000. Anyways...my agent said the seller knew of the foundation issue and is willing to give a credit for the repair. The agent has scheduled a foundation specialist to come out and give an estimate and the seller and I will negotiate from there.
Check the disclosures the seller gave you. Did he disclose this issue?
They are correct the inspector shouldn’t be giving repair cost I have my Texas home inspection License he should have referred you back to your agent get someone who does foundation repair let the inspector stick to inspecting
@Caleb Heimsoth Lol yeah, I think you are right. I'm very analytical and sometimes I overthink things. Thanks for the replies. You have been very helpful. I ended up reaching out to the seller and said I was good to stay at the original asking price contingent on him repairing the foundation as outlined in the inspection report prior to closing. He replied back that he'll send it to his contractor for a repair cost and will get back to me. So now I'm just waiting to hear back on his decision. If he ends up saying no then I'll just have to walk. I was clear to him that I had a lot of other things I'll have to pay to fix soon so anything less than him paying to repair it would make the investment no longer meet my minimum standards for ROI.
@Patrick Fraire No, he didn't mention it in the seller's disclosure. To my knowledge, you wouldn't be able to use that item as an unacceptable condition to back out of the contract and get your earnest money back if it had been clearly listed. You could still cite something else though of course. Obviously, it kind of sucks for us to discover foundation issues but a smart seller I would imagine realizes that he is just going to have to deal with this issue coming up again with the next buyer if he ends up sending you away so I am trying to hold my ground while being reasonable.
