Negotiating After the Inspections on a New House.

Are you retaining an attorney to represent you at closing? Since the legality of the check is in question, I'd consult a real estate attorney. Our atty fees for our recent purchase was $500. If you just have a simple question that can be easily resolved it should be quite affordable to have answered.

Another idea - www.Trulia.com is a great resource for both house listings AND even better, professional advice from local real estate agents. Perhaps you can post your question for the professionals in your area to answer. I got a TON of great answers to my questions when I posted there.

When we bought our house in Houston, they had the repairs done prior to closing and showed the receipts. When we sold our house in Kentucky, we did the same thing. I have never written a check for repairs and given it over to the buyer. Personally, I wouldn't want to do that.

I've never heard of a seller handing over a check at closing.

If there were issues, they are either repaired or the price of the house is dropped for a certain amount for an allowance for the new buyers to make needed repairs.

When we purchased our first house, allowances were made for repairs and we repaired things as needed. When we sold that house, we made repairs that the buyer wanted BEFORE closing.

We've since gone on to build 2 homes. When we sold the first home we built, we made an allowance on the contract so they could put their choice of new carpet in a couple of areas.

It sounds fishy to me that a seller would hand over a personal check. That makes it sounds like something is being done under the table that is not right.

Good luck.

Our bank flat-out refused to accept a "money-in-lieu-of-repairs" contract. It's considered a risk for investing, I guess. When we bought our previous house, the money was given to us for repairs before closing with the understanding that it would be repaid if closing did not take place. In both cases, the repairs and the money were amended to be a part of the contract, or I wouldn't have been willing to do it. I've actually never heard of the money being given via personal check at closing - it seems to open you up for issues (what happens if the check bounces?). You could have the cost deducted from the house price, maybe. Or you could just require that all of the issues be repaired before closing. Good luck.

I own a few homes and have never been handed a check for needed repairs. Most often the seller will fix any problems or deduct it from the balance of the home. Most often if they are minor repairs the buyers will just accept them.

Did you consider that the seller may not have the money to write a check? Or that they may be paying out of pocket to cover some of the mortgage?

We have one home for sale in PA and we have dropped the price 100k if we drop it any lower we will have to come up with thousands to pay the balance of the mortgage (which we don't have). Try to look at their situation before you get angry over it.

When we offered ont he house, our offer was accepted by the seller. The offer was "contingent upon inspection" which meant that if the inspection revealed problems, we would rescind or revise our offer.

If I understand correctly, the problem is that you and the seller had worked out a 'cash-back' deal. It may even be illegal.

Instead, because of what inspection covered, rescind your offer and submit a offer at a lower purchase amount. If your realtor won't do it, this speaks of shady practices.

I have never bought a house myself before, but have helped sell one, so my advice may not be totally right. But it seems that receiving a check from a seller is just wrong to fix issues. Usually, the money is taken out of the sale of the house or the closing costs per my understanding. I also don't see red flags about renegotiating the contract since the inspection only just happened. If nothing has been officially signed and no payments made, than the contract isn't even legit yet. I guess contacting an unbiased realtor or real estate attorney is the best thing here.

Yes different states have different regulations. Different programs have different regulations too, etc. And there are so many more restrictions when it comes to how money is handled between seller, buyer, banks, realtors, inspections, title companies. Everything must be done properly or there will be problems. There are way to many variances to really know your particular situation. To be honest the best way to handle this is to let your lender & the title company make this decision. The realtor should know that it's not his/her decision how money is handled. And unless the 'transaction' between you and seller are on the HUD, it typicaly is not *legal*.

We just bought a house a few months ago. Upon inspection there were several things that needed to be done, including some big ticket items... our agent changed the contract to amend what needed to be done, everyone signed and that was that.
I don't really see a big deal with changing the contract, it's all done electronically nowadays - a matter of hours. If it was me I would INSIST on everything regarding the transaction being in the contract ... (buying or selling).