It is easy to include a home inspection contingency into your offer, which is not always easy to fulfill. Can you make the necessary repairs shown in the home inspection report before closing or after the closing?
A good realtor will always recommend you have the home you plan to buy inspected before you sign the option to purchase – sale agreement, so you will not run the risk of buying a home that needs a new roof or any other large investment after you close on the property.
Usually, when you make your formal offer on a property, the offer should say something like “BUYER is allowed a home inspection, paid for by the BUYER within two weeks of the offer.
Only structural damages, septic, drainage or roof problems will give the BUYER the option of default.
Minor damages will be accepted by BUYER. The offer should also say that the seller is responsible for the maintenance of the property until closing. But do you want to wait until you move in to make repairs? Could you make the repairs prior to closing?
Option to purchase
A formal offer is not a legally binding agreement in Costa Rica. The option to purchase – sale agreement, also called letter of intent, IS a legally binding agreement, which is when the buyer will make an earnest money deposit. Between the formal offer and the option to purchase – sale agreement, everything is still negotiable. In this option to purchase, you should describe anything that is important to you, including the repairs.
The customary way is to make a statement about the minor repairs and what damages would not be acceptable to you. That means that you can change the last part “minor damages will be accepted by BUYER” before you sign the option to purchase – sale agreement. You might be better off to negotiate the sales price to compensate for the repairs the property needs instead of asking the seller to make the repairs.
The home inspection report will show you any defects the property has and repairs needed. Some sellers might agree to make the repairs and some do not. If the seller takes care of the repairs, you will have to hire the home inspector again to go back and check if those repairs are done correctly or not. Be aware that the seller is responsible for the maintenance of the property until closing and if there is any damage because repairs were not taken care of in time, the seller is responsible for this damage.
There are a few issues that can be very important and should not be left to be fixed after the closing:
- Septic tank
- Hot water tank
- Pressure pump
- Leaking roof
- Retainer wall
- Leaking swimming pool
- Solar heating system
Repairs prior to closing?
Another way to be sure the repairs are done well is paying for the repairs yourself. If you do the repairs before the closing, even with the approval of the seller, you run the risk of losing the work/money when you don’t close on the property. Keep in mind that the transaction is not closed until both buyer and seller have signed the deed and the buyer has the keys to the property in hand.
On the other hand, who would be responsible if something goes wrong during those repairs? Imagine a small accident when you are allowed to make the repairs prior to closing and your plumber is fixing a water pipe and the house gets flooded? Is it worth running that risk?
If you’re handy yourself, getting your appliances installed in your new house shouldn’t be a problem. BUT, if you’re not, ask your agent for a handyman. It’s will save you a lot of headaches.
My suggestion is to get your home inspector make sure there are no large investments to be made. Use the home inspection report to get a list of repairs to be fixed after the closing. It’s so much better to not make any repairs prior to closing, so you won’t run into trouble. And most of all, the real estate agent is not in the middle of it.
Contact us now for your Costa Rica property purchase.
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