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Aug. 17, 2006 - Cash in lieu of repairs

Here's today's scenario ...

After negotiating and agreeing to an offer, the buyer orders a home inspection during his 10-day inspection period. At the end of the 10 days, the buyer submits both a Buyers Inspection Notice and a copy of the inspection report to the seller. The buyer does not want the sellers to make the repairs themselves and instead asks for a $2,000 credit in lieu of repairs.

Question: Can the buyer request cash in lieu of repairs on the Buyers Inspection Notice?

Answer: Contractually, no. At the end of the 10-day inspection period the buyer has three options:

1. Purchase the house with no repairs requested
2. Request repairs be made to the home
3. Cancel the contract

Nowhere in the contract is the buyer given the option of asking for cash in lieu of repairs. If the buyer requests repairs, the seller has every right to make those repairs should they decide to do so.

Again, this is the contractual answer. Realistically, negotiating a cash credit in lieu of repairs happens fairly often -- it's one less headache for the sellers and the buyers can hire their own contractors and make sure the work is done to their specifications. And while such credits can be added to the Buyers Inspection Notice, I prefer writing them onto an Addendum since both parties are in fact altering the contract itself.

(c) Jonathan Dalton, 2006/ Jonathan Dalton's Arizona Homes