Is the Buyer Responsible for Short Sale Repairs?

Don't expect a short-sale seller to spring for any repairs.
i David Sacks/Lifesize/Getty Images

When shopping for a home, you may come across one on the market as a short sale. A short sale involves the owner selling the house for less than she owes on the mortgage and getting the bank to write off the difference. This is a complicated process and can take much longer than a regular sale. If you are considering buying a short sale home that needs some work, expect to pay for those repairs yourself.


If you are considering buying a short-sale property, you have to keep a couple of things in mind. One, if the owner is selling the property as a short sale, it means she can't keep up with her mortgage, therefore, likely doesn't have any extra money to pay for repairs. Two, the bank is already losing money on the sale, so it is not likely that it will agree to pay for any repairs or lower the price any more than already listed.

Use a Realtor's Help

Buying a short sale property is definitely one situation where you should use a Realtor's help. This means having a buyer's agent to represent you. Your real estate agent can do some research on the house to find out its history, and he also may have the expertise and experience to spot issues that may be in need of costly repairs, such as a worn roof or a cracked or bowing foundation.

Be Flexible

A short sale may already be priced below market value to try to attract a quick sale. Keep this in mind when considering your offer and what repairs may need to be made. If the house needs only some minor repairs, such as fixing leaky plumbing or replacing a broken door, it's probably worth your while to simply overlook those issues and consider them the cost of doing business.

Add Contingencies

Make sure that when you make an offer on a short-sale home, you add a contingency that allows you to back out of the sale if an inspection turns up costly repairs. This allows you to walk away from the sale and keep any good faith deposit you have made if the inspection turns up major issues, such as a leaky roof or failing foundation. You may even be able to write into the offer a dollar amount of repairs you are willing to accept. Make sure to ask the inspector for repair estimates for any issues he discovers.

the nest