What if the the seller didn't make that repair he agreed to make?

I recently had a loan officer call me to ask a question about "enforcement" of a repair that was contractually agreed upon in the form in Georgia titled "Amendment to address concerns with the property" when the buyers discovered at their walk-through that the repair had not in-fact been made.

There are some great practices for writing special stipulations in a contract and at Lane Realty we tend to be careful to use them so our sellers will be protected.  We use language that is clear, legal and ethical. We also  make sure the following questions are answered.

  • Who
  • What
  • Where
  • When
  • How
  • Who's cost
  • Consequences if not full-filled (most commonly left out)

An example of a poorly written request:

Seller to replace all laminate flooring in house.

 

Who will be doing the replacing? What will it be replaced with? what happens if the buyer hates what it's replaced with? What happens if it's not ALL replaced?

 

An example of a well written special stipulation:

Seller agrees to at seller's expense replace all of the laminate flooring with Riverbone Bamboo flooring from Lowe's 3 days prior to closing date set forth herein. Flooring to be installed by Lowe's of Milledgeville or another licensed installer approved by buyer in writing. If seller fails to comply $7,000 shall automatically be deducted from Seller's proceeds at closing and be credited to buyer's closing costs.

 

The second stipulation answers who, who's cost, what, where, when, how and consequences if not full-filled.

 

Typically speaking we also always talk to the buyer about the seller making a financial concession vs. the seller doing a repair or replacement.

For example if a HVAC unit needs to be replaced perhaps the seller will just agree to pay $6,000 in buyer closing costs or even reduce the purchase price by $6,000 if the buyer has the funds to replace after closing. That way the buyer can choose the company that replaces and be guaranteed of the warranty that accompanies a new unit. 

Do you want to hire an agent who will write a special stipulation for you that has to consequences for failure to comply?  What do you do then?  My advice to that loan officer was "don't close" until you work it out. If they did, then the buyer might be hiring an attorney to get the seller to comply.  The repair wasn't as simple as flooring in that call. I simply used flooring in my example to show how every special stipulation should be written.

Call Lane Realty when you are buyer a home.  The broker reviews every contract before it's submitted to make sure it's got clear, complete special stipulations in them. 706-485-9668

 

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Comment balloon 25 commentsTammy Lankford, • August 10 2018 06:40PM

Comments

Hi Tammy Lankford, you are so right!  Loosely written amendments can lead to a lot of headache down the road.  Nice post, thanks for sharing your thoughts.

Posted by Erika Rogers, St George Utah Real Estate & Relocation Specialist (Red Rock Real Estate ~ Southern Utah's Largest Independent Brokerage) 4 months ago

Hi Tammy,

The more specific the better.  People are always looking for the cheap way out.

Posted by Carol Williams, "Customized Mentoring & Marketing Services" (U.S.: I specialize in helping agents who have been in the business 2 years or less create a thriving business.) 4 months ago

Oh yes...the amendment begins: "Seller at Seller's Expense..." la la la...

Posted by Sally K. & David L. Hanson, WI Realtors - Luxury - Divorce (EXP Realty 414-525-0563) 4 months ago

Hi Tammy... great post... this is always a concern and I've learned to be very "tight" with my language when requesting repairs. Fortunately, have yet to come across a situation where the seller did not perform as expected.

Posted by Nina Hollander, Your Charlotte/Ballantyne/Waxhaw/Fort Mill Realtor (Coldwell Banker Residential Brokerage | Charlotte, NC) 4 months ago

Tammy, I have never been  a fan of Seller's chewing gum repairs and I prefer to negotiate Credits Back to the buyer, makes things so much easier...Endre

Posted by Endre Barath, Jr., Realtor - Los Angeles Home Sales 310.486.1002 (Berkshire Hathaway HomeServices) 4 months ago

Oh yes! This is something that I see agents misrepresent ALL of the time, Tammy - we MUST be vigilant about things like this as interpretation is not the same across the board. We must be specific and detailed to properly represent our clients - whether it be the buyer or the seller!

GREAT post!

Posted by Debe Maxwell, CRS, Charlotte Homes for Sale - Charlotte Neighborhoods (www.iCharlotteHomes.com | The Maxwell House Group | RE/MAX Executive | (704) 491-3310) 4 months ago

That’s actually very accurate and there areplenty of things you can do. Thank you for reminding all of us to be up on things. I appreciate it. :)

Posted by Laura Cerrano, Certified Feng Shui Expert, Speaker & Researcher (Feng Shui Manhattan Long Island) 4 months ago

Good morning Tammy Lankford, 

I agree totally..the better the request is written and with a consequence if not completed will be much more enforceable. I'm finding more and more its better to credit an amount (both seller and buyer agree on) to the buyer at closing towards closing costs. Cleaner and then the buyer can over see any work that needs to be completed with exactly who they want.

Posted by Dorie Dillard CRS GRI ABR, Serving Buyers & Sellers in NW Austin Real Estate (Coldwell Banker United Realtors® ~ 512.750.6899) 4 months ago

Love the specificity of that special stipulation.

Posted by Eric Sztanyo, Cincinnati & NKY Realtor® | TeamSztanyo.com (Keller Williams Advisors Realty) 4 months ago

Good morning Tammy Lankford, Definitely, we need to be very specifics when writing amendments and most of the time a credit towards the buyers  closing cost works better for everybody.

Posted by Abby Stiller, Professional Bilingual Realtor (239) 284-8637 (REMAX Realty Group) 4 months ago

In today's litigious society one must be able to account for the :

  • Who
  • What
  • Where
  • When
  • How
  • Who's cost
  • Consequences if not full-filled (most commonly left out)
Posted by Raul Rodriguez, Looking out for the client's interest and not my p (Covenant Partners Realty) 4 months ago

Great post, Tammy. We've stopped a closing from happening because a seller failed to comply. I do require that all repairs be done by a licensed and insured professional. A copy of the license and insurance is required prior to work being done. Most of the time, people do what they say they are going to do, but now and then, you'll get one who doesn't.

Posted by Mike Cooper, Your Winchester, VA Real Estate Sales Pro (Cornerstone Business Group Inc) 4 months ago

Great post and spot on!

Posted by Jordan Ayan, Luxury Market Expert, CLHMS,Million Dollar Guild (The Lifestyle Collection) 4 months ago

Love that you added 'licensed' 

 

Great post and congrats on feature!

Posted by L. Scott Ferguson, Sunny Florida Real Estate Professional (Ask4Ferguson - Your House-SOLD Name in Real Estate) 4 months ago

When I worked with buyers I specified two things: Fiorst the property would be reinspected before approval and second, any thing that requires a licensed contractor would be done by them only.

Posted by Joe Pryor, REALTOR® - Oklahoma Investment Properties (The Virtual Real Estate Team) 4 months ago

Clear communication tht leaves no room for questions can do so much toward avoiding lawsuits.

Posted by Marte Cliff, Your real estate writer (Marte Cliff Copywriting) 4 months ago

Hi Tammy- love this post and it's something that I've not thought about. But as they say, get it in writing, and in this case be specific so there is little room for misunderstandings or interpretations. 

Posted by Kathy Streib, Home Stager - Palm Beach County,FL -561-914-6224 (Room Service Home Staging) 4 months ago

"the better the request is written and with a consequence if not completed will be much more enforceable", totally agree Dorie Dillard 

Posted by Eva B. Liland with Century 21 Doug Anderson, Glad to be of Service (Century 21 Doug Anderson) 4 months ago

Tammy, so what is the end of this story? I assume this is a true story?

Posted by Mike Frazier, Northwest Tennessee Realtor (Carousel Realty of Dyer County) 4 months ago

Sounds to me like legal contracts or amendments, not my thing. I am not a lawyer, so glad we have attornys to do all this stuff.

Posted by Corinne Guest, Barrington Home Buyer Advocate (Barrington Realty Company) 4 months ago

Love this post, Tammy. I can't tell you how disappointed so many agents have been that they were vague in their inspection responses and not happy that the seller didn't interpret their requests in the way they meant for them to be. Too bad, so sad, is my general thought, although we certainly can take steps to smooth ruffled feathers. The "what happens if they don't perform" step is the most important thing that I see agents neglect to reduce to writing. 

Posted by Lisa Heindel, New Orleans Real Estate Broker (Crescent City Living LLC) 4 months ago

I'd say about 90% of the time that I get repair requests from buyer's agents on my listings I have to rewrite them because they are vague and/or poorly worded. Recent example "Seller to replace dry rot in garage" in reference to a water damaged door transition. Couldn't help myself, I called the agent and said "What do you want us to replace it with?" ;)

Posted by Patrick Willard 4 months ago

Great post for agents who profess to be professionals to be professionals in every aspect of a transaction. 

Posted by Kimo Jarrett, Pro Lifestyle Solutions (WikiWiki Realty) 4 months ago

I'm surprised you don't have more comments as this is SO important.  I came upon one of these the other day, "a credit of no more than $550...."  Should say, a credit of $550 paid by seller to buyer."  Ugh!

Posted by Jan Green, HomeSmart Elite Group, REALTOR®, EcoBroker, GREEN (Value Added Service, 602-620-2699) 4 months ago

Very good points about the sticky subject of repairs.  I always like to suggest a monetary compensation instead, so there is no question of who what when and what if.

Posted by Georgie Hunter R(S) 58089, Maui Real Estate sales and lifestyle info (Hawai'i Life Real Estate Brokers) about 2 months ago

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