Here's the scenario, a person makes an offer, a cash offer. They don't ask for any money, credit for repairs or anything like that. Then all of a sudden out to the blue, the listing agent, we'll say "Hey, we did the home inspection. There were 13 things and here's an addendum saying that the seller will fix them all." Does the seller have to fix the items?
Two things. One, the seller does not have to fix the items. Two, the seller should not fix the items. If it's a deal-breaker, then credit the buyer back, and here's why. Two reasons. One, the buyer may not be happy with the repairs that you made, even though you've spent a lot of money to make those repairs. Two, if the buyer walks and you have to put the house back on the market, then the next buyer will have another home inspection and you'll have other things to fix. If you credit the buyer, then if the deal closes, that's fine. If the deal doesn't close, you haven't spent any money. So you're still fine. So it's very important that you not make the repairs off the home inspection. That's not the same thing as the repairs off an appraisal.
So let's talk about the second thing. A home inspector is going to find everything potentially wrong with the house. Meaning, oh, there's a loose wire. This floorboard is this. The ceiling is bent here. The dishwasher leaks. Okay. The appraisal conditions, if they're getting a loan, are different. Why is that? Why are they special?
Appraisal conditions are special because this means that the buyer cannot get a loan without these items being fixed. So there are two cases where it's important to make the repairs. One, if it's an appraisal condition and if it's an FHA appraisal, then it makes all the sense in the world to make those repairs. Make those repairs, because even if this buyer falls out, that FHA appraisal will stay with your property for months, which means that whatever conditions are on that appraisal will apply to the next buyer who wants to get an FHA loan. Make sure to use a reputable contractor as you don't want to end up with more problems, or worse, having to sue for property damage.
So if the deal falls apart, the next person there's already an appraisal there, there's already the conditions. You've already fixed them. You can even market and say, "Hey, we have an FHA appraisal and the conditions have all been met."
If it's not FHA appraisal, let's say it's a VA or conventional or something else, then you still need to make those repairs in order for that buyer to be able to get a loan on the house. So if you want to sell to this buyer and this buyer needs a loan, you have to make those repairs.
