After a home inspection, Buyers may ask the Seller to complete repairs, reduce the price, or provide a credit. For Sellers, the best response is not always obvious.
A Seller credit for repairs may save time and allow the Buyer to control the work. In other cases, Seller repairs before closing may cost less, improve the property’s appeal, or be necessary for financing or insurance.
For anyone selling a home in Los Angeles, the decision should be based on the repair, the Buyer’s loan, the closing schedule, and the risk of taking responsibility for the work—not simply on which option sounds easiest.
Our Los Angeles home-selling guide covers additional ways to prepare, price, and market a property.
When Making Repairs May Be Better
The Problem Affects Marketability
Visible defects can create a poor first impression and cause Buyers to worry about larger hidden problems. Active leaks, broken windows, damaged flooring, plumbing problems, and obvious electrical issues can distract Buyers from the home’s stronger features.
Correcting these items may help prepare a home for sale, support the asking price, and prevent the same Buyer repair request from appearing in every offer.
A pre-listing home inspection may also identify these issues before they become part of home inspection negotiations.
The Work May Be Required for Financing or Insurance
A repair credit at closing does not solve every problem. A lender, appraiser, or insurance carrier may require certain conditions to be corrected before approving the loan or policy.
Potential lender-required repairs often involve safety, security, structural condition, or basic property functionality. The Consumer Financial Protection Bureau notes that some loan programs may require significant repairs to be completed before closing as a condition of financing.
When the Buyer cannot obtain financing or insurance until the work is completed, a closing cost credit may not keep the transaction together.
The Seller Can Complete the Work for Less
Buyers often build uncertainty into their repair estimates. A Buyer may request a large credit for work the Seller can complete properly for much less through a trusted contractor.
When the scope is clear and time allows, making the repair can protect the Seller’s proceeds. The Seller should use qualified professionals when appropriate and retain invoices, permits, warranties, and other documentation.
When Offering a Credit May Be Better
The Buyer Wants Control Over the Work
For flooring, appliances, countertops, paint, fixtures, and other items involving personal taste, Buyers may prefer to choose the materials and contractor themselves.
If the Buyer plans to remodel, the Seller could spend money on work that is removed after closing. A negotiated Seller credit for repairs gives the Buyer flexibility while helping the Seller avoid unnecessary improvements.
Time Is Limited or the Scope Is Uncertain
Repairs can delay closing when contractors, materials, permits, or inspections are involved. The work may also become more expensive once it begins. A small leak can reveal water damage, and a roof repair can expose deteriorated wood.
In these situations, a defined credit may be easier than taking responsibility for an open-ended project. It can also reduce later disputes over workmanship because the Buyer selects and supervises the contractor.
The Seller Cannot Reasonably Manage the Project
Credits can be especially practical in Trust, Probate, and Conservatorship sales, where a Trustee, Executor, Administrator, or Conservator may not live near the property or be able to supervise construction.
Our guides to Trust Real Estate, Probate Real Estate, and Conservatorship Real Estate explain more about these specialized transactions.
How a Seller Repair Credit Actually Works
A “repair credit” is not always cash the Buyer receives for future work. In many financed transactions, the credit is structured as Seller concessions toward allowable closing costs, prepaid expenses, or other lender-approved charges. It reduces the Buyer’s cash needed at closing, but the Buyer remains responsible for completing and paying for the repair afterward.
The Consumer Financial Protection Bureau explains that a Seller may contribute toward the Buyer’s closing costs instead of making repairs. However, the credit reduces the Buyer’s costs at closing; it does not eliminate the eventual cost of completing the work.
The amount and structure depend on the purchase agreement, loan program, lender guidelines, appraisal, and the Buyer’s eligible closing costs. For conventional financing subject to Fannie Mae guidelines, Seller contributions are also limited by the Buyer’s actual closing costs and applicable financing-concession limits.
If the credit exceeds what the Buyer can use, the parties may need to adjust the amount or consider another solution. Before finalizing a repair credit at closing, the Buyer’s lender should confirm that the full credit is permitted and usable.
Five Questions Sellers Should Ask
Before responding to a Buyer repair request, consider:
- Does the issue affect safety, financing, insurance, or marketability?
- Can it be repaired properly and economically before closing?
- Is the Buyer’s estimate supported by contractor quotes?
- Could starting the work reveal a larger problem?
- Can the Buyer fully use the proposed credit under the loan program?
The best solution may be a combination: complete a repair required for financing or safety, then offer a smaller credit for certain other work requested by the Buyer.
Does Selling “As-Is” Eliminate Repair Negotiations?
Usually, no. Selling a house as-is generally means the Seller is not promising in advance to make repairs. The Buyer may still inspect the property, submit a request, or exercise rights under a real estate inspection contingency. The Seller can agree, decline, or negotiate, depending on the purchase agreement and the status of the contingency.
Our article, What “As-Is” Really Means When Selling a Home in Los Angeles, explains the distinction in more detail.
Frequently Asked Questions
Is It Better to Make Repairs or Offer a Credit?
Repairs may be better when the issue affects financing, insurance, safety, or broad Buyer appeal. A credit may be better for cosmetic work, uncertain projects, tight timelines, or repairs the Buyer wants to control.
Is a Price Reduction the Same as a Repair Credit?
No. A price reduction lowers the purchase price. A properly structured credit can reduce the Buyer’s upfront closing expenses, subject to lender approval and loan limits.
Does a Seller Have to Agree to Inspection Repairs?
Not automatically. The answer depends on the purchase agreement, remaining contingencies, and the parties’ negotiations.
Should the Seller Use the Buyer’s Contractor?
Not necessarily. If the Seller completes the work, using an appropriately qualified contractor of the Seller’s choosing generally gives the Seller more control over cost, scheduling, and documentation.
Final Thoughts
There is no single answer to whether a Seller should make repairs or offer a credit. The right strategy depends on the condition, cost, timing, Buyer financing, and potential liability. Effective home repair negotiations are not about automatically agreeing or refusing. They are about choosing the solution that protects the Seller while keeping a viable transaction moving toward closing.
If you are a Los Angeles home Seller and would like help evaluating repairs, Seller credits, or how to prepare your property for listing, Contact Us. You can also read our Client Testimonials to see how we have helped Sellers and Estate Clients throughout Greater Los Angeles.
