When it comes to selling your home, the process isn’t just about listing it and waiting for offers. One of the most critical—and often stressful—stages in the home selling journey involves handling repairs and concessions. These can affect your home’s marketability, how long it sits on the market, and the final sale price.
Sellers often face a tricky balancing act: invest in repairs upfront or offer credits and concessions after the home inspection. Understanding your options and how they impact your bottom line can help you make more informed decisions.
What Are Repairs in a Home Sale?
Repairs are any fixes or improvements made to a home to bring it up to acceptable standards for sale. These might include:
• Fixing a leaking roof
• Replacing broken appliances
• Patching drywall or repainting walls
• Repairing plumbing or electrical systems
• Addressing water damage or mold
• Improving curb appeal or landscaping
Some repairs are optional, but others are critical to closing a sale. If your home has structural or safety issues, most buyers will expect them to be resolved before moving forward.
What Are Concessions?
Concessions are compromises or financial incentives offered by the seller to make the deal more attractive to the buyer. Common types of concessions include:
• Offering credit toward closing costs
• Reducing the sale price in lieu of repairs
• Paying for a home warranty
• Covering inspection or appraisal fees
• Agreeing to make repairs after closing
These are often used in negotiations when the buyer wants changes made but the seller prefers not to do the work themselves.
Pre-Listing Repairs vs. Post-Inspection Concessions
Pre-Listing Repairs
Some sellers opt to make repairs before listing their home. This helps ensure the property looks well-maintained and can prevent issues during the home inspection phase. Benefits include:
• Faster sale
• Higher offers
• Smoother inspection process
However, this comes with upfront costs and effort. You’ll need to hire contractors, schedule work, and potentially delay listing your home.
Post-Inspection Concessions
Other sellers prefer to wait for the buyer’s inspection and offer concessions if problems arise. This strategy saves upfront costs but can:
• Lead to stressful negotiations
• Result in lower offers
• Extend the timeline of the sale
Buyers may also walk away if the inspection report reveals too many red flags.
How to Decide Which Repairs to Make
Before listing your home, consider getting a pre-inspection. This gives you a clear picture of what might come up later and allows you to be proactive. Evaluate:
• The Cost of Repair vs. the Cost of Concession: Will it cost less to fix the problem than offer a credit?
• Time Required: Do you have time to manage the repair before listing?
• Market Conditions: In a seller’s market, you may get away with fewer repairs. In a buyer’s market, concessions may be expected.
• Buyer Expectations: In competitive areas, buyers may overlook small flaws. In suburban or luxury markets, they might expect move-in-ready homes.
Another factor to consider is whether a small repair could drastically improve the visual impression of your home. A minor investment in paint or lighting can go a long way in buyer perception.
Common Repairs Buyers Request
Certain repair requests come up frequently in buyer inspections. These include:
• Roof leaks or shingle damage
• HVAC servicing or replacement
• Plumbing leaks or outdated piping
• Electrical panel upgrades or code violations
• Pest control or termite damage
• Foundation cracks or uneven flooring
These items can be deal-breakers if left unaddressed. It’s wise to anticipate these requests and prepare accordingly.
How to Negotiate Repairs and Concessions
Negotiations typically begin after the buyer’s inspection report is delivered. Here’s how to handle them effectively:
1. Review the Report Objectively: Focus on safety or structural concerns over cosmetic issues.
2. Prioritize Repairs: Address major repairs and be flexible on smaller ones.
3. Offer a Credit or Price Reduction: Many buyers prefer a credit so they can control the work themselves.
4. Hire a Qualified Contractor: If you agree to make repairs, hire licensed professionals and provide receipts.
5. Work with Your Agent: A good real estate agent can help you assess what’s fair and advise on strategy.
Don’t forget to respond quickly—delays in the repair negotiation phase can lead to buyer frustration or even deal termination.
When to Offer Concessions Instead of Repairs
There are situations where offering a concession makes more sense than completing repairs. These include:
• Time Constraints: You need to close quickly and don’t have time to schedule work.
• Cash Flow Limitations: You can’t afford to make repairs before closing.
• Buyer Preference: The buyer prefers to choose their own contractor or materials.
• Non-Essential Repairs: The issue is not urgent or a health hazard, so it can wait.
Offering a well-calculated credit shows goodwill and can help keep the sale on track. It also gives the buyer flexibility and control over how the repairs are completed.
Legal Considerations in California
In California, sellers are legally required to disclose known material defects. Failing to do so can result in lawsuits or canceled sales. Disclosures are typically made through a Transfer Disclosure Statement (TDS) or Seller Property Questionnaire (SPQ).
Also, any agreed-upon repairs or concessions should be included in the purchase agreement or as an addendum to protect both parties.
California law also mandates certain safety features, such as working smoke detectors and carbon monoxide detectors, to be present before the sale. Be sure to confirm these are installed and working to avoid last-minute issues.
Final Thoughts
Repairs and concessions are key parts of the home selling process. Whether you handle issues upfront or negotiate after inspection, it’s important to be transparent, strategic, and prepared.
Knowing when to fix something and when to offer a credit can save time, reduce stress, and help you sell your home faster and for a better price. With the right approach and guidance from a skilled real estate agent, you can handle this part of the process with confidence and clarity.
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