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  • Writer's pictureWendy Boso

Closing costs or repairs? What's the difference when I negotiate?


I submitted a repair addendum for a bunch of things to be fixed and the seller countered with a price reduction. What should I know?

There are benefits and risks to this situation. So before I get too deep. It’s important to ask about your cash on hand situation…..How much cash do you have? Has it been spoken for with a kitchen/bathroom remodel? It’s important to understand because I’m assuming you asked for these repairs to be done because you find them required for you to purchase the home, YES?

Below I’ll go through the pros & cons of all of them. Hopefully this will lead you in the right direction. If not, you can always terminate the transaction…….

Price Reduction

· Buyer is in charge of the contractors and can take your time to get a cheaper bid, hypothetically.

· Easier to negotiate, nothing to check, as long as it doesn’t become an appraisal issue.

· Buyer will have to have the cash on hand to pay for the repairs later.

· The difference in monthly payment will not support the lump sum amount.

· Potential risk if additional items are found in process, but you’ll be in control.

Closing Costs Credit

· Buyer will be compensated dollar for dollar which will reduce the amount required to close and leave the lump sum in your pocket to pay for the repairs after closing.

· If another repair reveals itself after close which would have been revealed during the repair process before closing, the seller would be required to disclose it.

· Buyer is in control of which contractor is hired and when.

· Monthly payment stays the same.


· Seller is most likely in control of the hired contractor.

· Repairs may be done as cheaply as possible, but as agreed.

· Aesthetics may not be a priority.

· Closing may need to be extended

· Appraisal may need to inspect repairs and this could incur a reinspection cost

Of course, in a transaction all parties must be in agreement. So, It’s important to be open to multiple options if this is the property for you. After all, what your first choice may be, may not be acceptable for the other principal.

Hopefully this outline can give you a good baseline of information. I’m sure it will also create some new ones too! Happy to discuss your specific situation and offer insight on what options you may want to consider.

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