Home Repairs Often a Part of the Homebuying Process
But part of any homebuyer’s budget needs to allow for home repairs. More often than not, homebuyers will need to pay for repairs during or in the year immediately after purchasing a home.
“It used to be one per cent of the sales price of a home could be expected each year for repairs and maintenance,” explains real estate agent Danielle Keil, “but that was before the recent rise in prices.”
Nor does it mean that your sellers are scoundrels. You and your sellers probably use the home differently and to varying degrees, and some things break just with the passing of time.
But particularly for the closing, homebuyers want to know how much of that cost they will face right away. “You want to know what to expect,” Keil explains.
How much of a particular repair will be paid by the seller, or credited to buyers on closing, often depends on the particulars of the home in question.
“Sellers usually only have to put in smoke detectors and strap the water heater. All other repairs are up to negotiation, and it all depends on the market as to whether the seller will make the repairs or the buyer,” Keil notes.
Keil says that makes a home inspection a key part of the homebuying process, paying particular attention to the more common repair areas, such as the electrical system, the heating system, plumbing, and the roof.
Question marks may warrant a more specialized type of inspection. “In the case of a roof, I think, if it’s not a new roof or you aren’t sure of the date of the roof, if there’s no paperwork documenting its age, you should get a roof inspection,” Keil notes. She says that, for about $100, a roofing contractor will inspect the roof and certify that it is water-tight.
A termite report is another common inspection in the mild but damp Bay Area climate.
As to how much it will cost homebuyers, and whether sellers will chip in, Keil leaves that to the current market. “I had a number of deals where the home was sold as-is, so there was, say, $5,000 in termite damage, but the work was not done by the seller. But the market has slowed down a little, so there’s more negotiating going on now.”
(For a rough estimate of home repair costs, see All Bay Home Inspection’s web site at www.allbay.com/cost.htm.)
Keil says that buyers shouldn’t operate in the two extremes – asking for everything or asking for nothing – but instead, strike a reasonable middle ground. “You don’t want to jeopardize the sale because of a cracked window, but you shouldn’t just not ask, either,” she notes.
In addition to possibly assisting with or making some repairs, sellers may also offer a home warranty. Usually costing around $300 for one year’s coverage, the warranty will usually cover major systems in the home. However, Keil cautions that each home warranty service is a bit different. Some coverage will repair the problem, but charge the homeowner a $50 fee. Also, warranties tend to be very specific about what they will and will not charge.
“For instance, a warranty may cover the plumbing of a home, but not cover the plumbing fixtures. It’s really important to read the fine print,” Keil notes.
If homebuyers still have concerns about the cost of home repairs, Keil suggests talking to the home inspectors. “Ask the inspector, ‘What is really a must?’ Usually, inspectors will provide an overview list that indicates what needs to be addressed right away,” she explains. Special reports, such as termite reports, have Section I and II items, with Section I requiring more urgent attention.
Even with all of this attention, homebuyers should still expect unexpected expenses. “For instance, you may use more water than the previous resident, and so your water bill could go up,” Keil explains.
Other than budgeting a certain amount for the unexpected, Keil says a knowledgeable real estate agent is key. “It’s a matter of just being sensible, getting a licensed person to do an inspection, and looking at the reports with your realtor,” she says.
