So now that your property is under contract, what comes next? For most real estate transactions in our local area, the next step is for the buyer to perform a home inspection. This can be done of their own accord, or as in most instances, your buyer will likely hire a licensed home inspector. Once that inspector has completed their inspection, they will usually have their report to the buyer within a few days, and then repair negotiations occur between both parties.
While this process is somewhat a back and forth exercise between the buyer and the seller until both parties agree on which repairs the owner will perform, and which the buyer will accept, we’re going to shift our focus to the actual documentation of those repairs and why that documentation is so important.
Most repair lists that our team sees are broken down into two main categories: repairs to be completed by the owner & repairs to be completed by a licensed professional in either a general contracting field, or specialty field such as plumbing.
As a homeowner, it’s important to keep in mind that once these repairs are agreed upon, the buyer will have expectations that they be completed as negotiated. Not doing so could result in a delayed closing, hiring a professional to repair what should have been done by a professional in the first place, or worse…..your buyer not closing the deal.
Documentation is key. If your repair addendum calls for a licensed electrician to evaluate and repair missing GFCIs, two missing breaker panels, and replace a bad light fixture, you should insist that once the work is completed, the electrician provide you with an invoice stating those exact items. This would go for any work to be completed by any licensed professional or contractor. Their invoice needs to show that the work was paid in full, and the itemized list of repairs should mirror the repair addendum as closely as possible. The clear expectations set in the repair addendum should be conveyed to the contractor/licensed professional in the same way; with expectations that they will detail their invoice in a manner that leaves little room for misinterpretation from the buyer.
Most buyers will perform a final walk-through prior to closing, and some will even bring their home inspector along to re-evaluate the items that were repaired. Being able to provide invoices for the work ahead of time goes a long way to easing the buyer’s mind, and getting them to the closing table without hesitation. In cases where certain work is to be performed by the owner, we always recommend providing receipts for items that were purchased (even if it’s just paint and caulk), and making sure that the work was completed in a good and workmanlike manner.
And as always, before hiring a professional, we recommend checking local and state websites to ensure their licenses and certifications are up to date.