DEAR BERNICE: My husband used to work in the construction industry before he earned his college degree. He’s pretty handy and can fix most things around the house. We recently listed our house and received an offer. When the buyers did their physical inspection they came back with a laundry list of things for us to fix. My husband can handle most of the work, but our Realtor was really against it.
She recommended giving the buyers a credit and letting them do the work. She also recommended that we pay for a home warranty for the buyers. My husband isn’t thrilled about her ideas. What do you recommend? –Cathy Y.
DEAR CATHY: It’s your house and your decision about how you handle this. However, I’m inclined to agree with your agent on both accounts. A number of years ago I had an attorney client who purchased a home. The roof was leaking and needed repair. The seller provided us with receipts stating that the roof had been repaired, and we closed the transaction.
About four months later, when we had the first rains of the season, the roof leaked right on top of the attorney’s newborn baby. She hired a roofer who inspected the property. It turns out that whoever had done the repairs had just splashed some tar on top of the roof instead of removing and replacing the damaged shingles and repairing the water damage. The attorney had to fix the roof in order to prevent further damage. Needless to say, she was extremely angry and decided to sue the seller for damages.
The seller argued that he had hired a roofer (his brother-in-law) in good faith and had paid for the repairs. The seller was trying to pass off the responsibility because the roofer was the one who did the poor job.
What’s interesting about this case is how the judge made the ruling. The judge ruled that the seller owed the buyer for the damages she incurred, for the roof repairs (based upon the seller’s representation that the roof was free of leaks at the time of closing) and for court costs. The judge did not require the roofer to pay for any of the damages.
Instead, the judge told the seller he had a separate cause of action against the roofer. In other words, the seller would have to sue the roofer for the damages he incurred. …CONTINUED
If you or a contractor that you hire does the work that the buyers request, then you could be responsible for that work. Granted, if it’s as simple as fixing leaky faucets, painting or other minor work, it’s not a big issue. On the other hand, if it is part of the main systems in the house such as the plumbing, heating or roofing, it would be wise to turn it over to a contractor, preferably one who is willing to guarantee his or her work in writing.
Ideally, it’s preferable to give the buyers a credit that they can use to repair the property after closing. Granted, if there is a broken appliance or plumbing that is not working properly, that problem will need to be addressed prior to closing. Nevertheless, because of the situation described above, giving the buyer a credit means you’re off the hook for the work that is done after closing. If there is an issue, it’s between the buyer and the buyer’s contractor.
Your agent gave you great advice when she recommended ordering a home warranty. This is one of the smartest moves that you can make. A number of home warranty companies provide a special seller policy that goes into effect as soon as you order it. If your dishwasher or your water heater goes out anytime during the listing period, the warranty company will repair or replace those items for you.
All you pay is a relatively small fee for the contractor’s visit. When the property sells, the buyer receives a new home warranty policy that runs for the entire year. If the buyer has an issue, he or she can take it up with the home warranty company rather than coming after you.
Since a number of owners have reported challenges with some home warranty companies, ask your Realtor for her recommendation. It would also be wise to search online to check out the comments regarding how well the company responds to client requests. If your husband decides to do the work himself, at least take the step of ordering a home warranty policy to limit your exposure after the transaction closes.
Bernice Ross, CEO of RealEstateCoach.com, is a national speaker, trainer and author of "Real Estate Dough: Your Recipe for Real Estate Success" and other books. You can reach her at Bernice@RealEstateCoach.com and find her on Twitter: @bross.
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