Of the many decisions made while buying a home, negotiating post-inspection repairs and upgrades with a seller might be one of the most fraught. There's a fine balance to ensuring you don't end up in a tough financial spot over necessary fixes while also not risking the deal falling through.
Home inspections are a standard step in the process, and it's not uncommon for issues—both major and minor—to arise, at which point you as the buyer have a handful of options: If you want repairs done, you can request that the seller take care of them prior to closing, or you can negotiate a credit to cover the cost of the work at a later date. Alternatively, you can move forward with buying the home as-is or—as long you didn't waive your inspection contingency—walk away.
The decision likely depends on how serious the problem is as well as factors like closing timelines, seller motivation, and competition in your local market, which may discourage you from negotiating all but the most severe issues. Here's what to consider when asking for a credit vs. a repair.
When to ask for a credit
Negotiating a credit puts you in control of the work done on your new home, which you are likely to care more about than a seller who is trying to close the deal. This allows you to take your time to make design decisions, solicit contractor bids, select materials, and manage the project yourself rather than leaving those details to someone else or having the seller serve as a middleman.
A credit can also save you money if you can do some of the work yourself, and it won't delay the closing timeline, which is possible if you have to wait for repairs to be completed. A delay could also compromise other parts of the transaction, such as financing or your current rental contract.
Note that a credit is typically applied at closing, meaning you need to bring less cash upfront and have more in the bank for use on repairs at a later date. If the requested credit is less than or equal to your closing costs (and within limits allowed by your lender), this is likely a good option.
When to request a repair
On the flip side, asking the seller to fix the issue may be a better choice if the repair is urgent or could uncover additional problems, such as mold or hidden structural defects, once the work begins—in which case a credit may not actually cover the cost.
You should also consider negotiating a repair over a credit if you simply don't want to have repairs outstanding at closing. Your financing may also be contingent upon the home meeting certain standards.
Finally, know that you can also negotiate a mix of repairs and credits if there is a significant amount of work to be done. Once you receive your inspection report, get at least three contractor quotes for any needed repairs, and then approach the negotiation with care, focusing on the major issues rather than the cosmetic ones.