Q: The closing on my new house is next week but there are still some repairs the seller needs to complete. What should I do? Postpone the closing? I really want to move in already.
A: This definitely can happen. The seller agrees to make certain repairs and sometimes they take longer than expected to complete. There are a number of options but if you don’t want to close, then you’ll have to close prior to the work being completed. The important thing is to make sure the work is going to be done correctly. There are a few steps to take to make sure this happens.
First, have the title company “hold back” the needed amount of money for the repairs based on the estimate or invoice provided by the contractor. Next, make sure the contractor has been scheduled or even has started the work, if possible. This way you know you won’t have to wait too long. Finally, be sure to check the work once the repairs are complete and confirm the work has been done to appropriate standards. You can do this by having the original inspector come out and check it or by getting the city to check the work if that is warranted. Once the work is completed, the title company will release the funds to the contractor.
All of that said, there can be a bit of risk that something may come up during the repairs that costs more than expected. If you’re worried about this at all, then ask the seller to leave a bit more money with the title company than is in the estimate. Some people like to go with 10 percent to be safe. If the costs are as expected, then the seller will just get a check when the work is done. If it does cost more, you won’t have to come out of pocket with anything to complete the work unless the costs are surprisingly higher and then you’ll have to decide if you’re going to go back to the seller for more money or not.
So, if you feel strongly about closing before the work is done, there is a path to doing so which usually works out just fine. But, it’s not devoid of all risk, so if that makes you anxious, you might want to wait to close until the work is done. Regardless of what you choose, congrats! You’re buying a house and it sounds like you’re almost there! Enjoy making your new house a home.
Talia Freedman is the owner of Talia Freedman and Co.