Last Minute Due Diligence Repair Requests

QUESTION: More and more it seems that buyers are waiting until the last minute – sometimes literally – of the Due Diligence Period to submit their repair requests. I am very frustrated with this kind of negotiation tactic, and other agents in my firm are as well. What can we do about this problem?

ANSWER: We have previously written here and here and here that a buyer should not wait until the last minute to make their repair request. Given the disadvantage to the  buyer when the repair request is made last minute, we are not sure how this could be a “negotiation tactic” that actually helps the buyer. Nevertheless, if the seller does  receive a last minute request, there are several ways to approach the issue.

First, the seller could agree to the repairs they feel comfortable with and proceed with the transaction. Once the Due Diligence Period ends, the buyer cannot walk away for  any reason or no reason. Since the Earnest Money Deposit is at risk for the buyer, the seller can complete the repairs knowing that the buyer has more to lose if they  consider terminating the transaction.

Second, the seller can decline to perform any repairs at all. In cases where the buyer is submitting a repair request quite literally minutes before the end of the Due Diligence  Period, the seller will not have time to review all the requests and make their own evaluation. Declining to make repairs will put the ball back in the buyer’s court and make  them decide whether the take the property “as-is.”

Brokers should note that there is nothing in the contract that requires repair requests to be made at a certain time. Repairs can be made during or past the Due Diligence  Period, even though buyers are encouraged to submit their requests early to ensure the agreed-upon repairs are done properly as required by the Offer to Purchase and  Contract (Form 2-T). The seller is under no obligation to make repairs under Form 2-T unless they agree in writing to do so. Informing your seller of these parts of the Form 2-T at the outset of the transaction will help them make a better-informed decision should the buyer make a last minute request.

Release Date: 10/4/2018

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