With almost 5 years of experience in the real estate industry, this is my first home where the seller did not complete repairs according to the repair agreement.  In this particular situation, we returned to do the re-inspection and found the following: repairs not complete, repairs not up to code, and repairs addressed differently than outlined on our signed repair agreement.  All items were not completed according to the contract signed by both the seller and buyer.  This is a rare situation, but it does happen occasionally.  Your agent can do a few things to address this situation: 

1. Have a well-written contract (and specifically a well-written repair agreement). All language and requests should be specific – not ambiguous.  For example, at this property, there was a leaky faucet.  In the repair agreement, you could list “repair leaking bathtub faucet”.  If, however, the faucet cannot be repaired, the seller may not be responsible for replacing it and then the buyer may be hit with an extra expense.  I recommend always writing “repair or replace leaking bathtub faucet”. This holds the seller responsible for fixing the issue completely.  At this property, we also had a water barrier issue with the siding.  The inspector specifically recommended z-flashing.  In the repair agreement, I specifically wrote “install z-flashing” rather than a more ambiguous “resolve water barrier issue on siding”.  The seller’s contractor only caulked the area instead of doing the z-flashing. Since it was written in the signed repair agreement, we were able to hold the seller to the specific z-flashing repair.  A roofer had to return to the property to complete the repair according to our signed repair agreement. It is very important to be specific in the contract.  If you have problems, it is important you hold the seller to what he or she agreed to in the signed repair agreement. 
2. Write language into the contract where seller pays for re-inspection fee if repairs are not completed correctly the first time.  With our company, we have a standard addendum that includes this wording.  It states: if an inspector has to return for a re-inspect because the seller did not repair or replace the damage as per the agreement, the seller will be responsible for the re-inspection fee. Having this addendum in the original contract incentivizes the seller to get the repairs right the first time.  It also penalizes the seller if he or she does not complete the repairs before the first re-inspection. With this property, the re-inspection fee was $150.  Of course, my buyer did not want to pay the fee.  At closing, the fee was deducted from the seller’s proceeds and paid to the inspector.  This clause is not in the normal contract.  It will need to be added by the buyer’s agent.  
3. Before initial re-inspection, get all receipts for completed repairs.  According to the NEFAR* contract, the seller is required to provide a copy of receipts for all work to the buyer.  Once the buyer moves in, the buyer will be able to contact the vendor listed on the receipt if the repair has an issue later down the line.  Additionally the receipts show that a licensed professional completed the repair.  The NEFAR* contract requires licensed professionals to do all repairs.  A handyman may be cheaper but he is not a licensed contractor, roofer, or plumber.  When you receive the receipts, you can check that all the repairs listed match the repair agreement.  Next you can check the completed repairs were finished by a licensed contractor.  Once this is verified, you can schedule the re-inspection. 
4. After the initial re-inspection, require pictures of the newly completed work before scheduling another re-inspection.  Pictures help you verify the work is complete and that the work is completed correctly. It provides an extra level of protection especially since the seller didn’t have repairs complete the first time.  It ensures that the buyer’s agent, the inspector, and the buyer are not wasting their time on yet another inspection.  
5. DO NOT CLOSE if repairs are not done – even if the seller says he or she will do it after closing.  I do not allow my buyers to do this but I have friends who have closed without everything being complete.  They deeply regretted it after! Once the seller has his money, there is no motivation to follow through as promised.  You need to make sure everything is completed as per the contract before signing the final paperwork.  With this property, the seller did not maintain the property as per the contract.  We required the lawn be mowed prior to closing or we would not be signing the paperwork.  Additionally, we had issues with the seller paying the $150 re-inspection fee as per the contract.  We stated we would not close unless he paid it.  Both of these items – the lawn ($40) and the re-inspection fee ($150) – are minimal expenses compared to the $140,000 the buyer is paying for the property.  By not closing until the seller addresses the issues, you are preventing him from receiving his $140,000.  A seller would be very silly to not close over these minimal expenses, especially if the buyer has loan approval.  The buyer needs to maintain that leverage until all of the contract is met.  By closing without everything being completed, you are taking away all of your leverage and you should not expect to see any results from the seller after closing.  Do not close until the repairs are complete, receipts received, and all repairs inspected.  

*NEFAR=North East Florida Association of Realtors

 

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