After a home inspection, nobody is automatically on the hook for repairs. The purchase contract decides who pays for repairs after a home inspection, and in most deals that means the buyer and seller negotiate from the inspection report, with the mortgage lender and a short list of legal requirements overriding that negotiation in specific situations.
The inspection itself usually runs $260 to $575 depending on the size and age of the home. The report lists problems. It does not assign them.
How the Inspection Contingency Sets the Leverage
The inspection contingency in the purchase agreement is what makes the negotiation possible. It typically gives the buyer seven to ten days after offer acceptance to have the property professionally examined. During that window, the buyer can ask the seller to fix specific defects, reduce the price, or provide a credit at closing.
If the two sides can’t agree, the contingency lets the buyer cancel the contract and recover the earnest money deposit. That exit is the clause’s real power. It motivates both parties to find a middle ground, because the seller doesn’t want to relist and the buyer doesn’t want to start over. Most deals land somewhere between the buyer’s wish list and the seller’s refusal, and the transaction moves forward.
What Sellers Usually Pay For, and What Buyers Absorb
There’s no universal rule, but the pattern is consistent. Sellers are much more likely to pay for problems affecting structural integrity, major systems, or safety: foundation cracks, failing roofs, faulty electrical wiring, non-functional plumbing, broken HVAC. These are the items that lenders, appraisers, and reasonable buyers treat as deal-breakers.
Cosmetic items almost never become the seller’s problem. Scuffed floors, dated paint, minor drywall dings, worn carpet: those are wear-and-tear issues the buyer absorbs. Many purchase contracts explicitly bar the buyer from requesting cosmetic fixes and limit negotiation to structural, code, or safety deficiencies. If an inspection report lists 30 items and 25 are cosmetic, the buyer realistically has five worth raising.
Buyers negotiate best when they focus on a short list of expensive, objective problems. Asking a seller to repaint a bedroom gets refused. Asking a seller to address knob-and-tube wiring or a water heater venting carbon monoxide into the living space gets a serious response.
As-Is Sales Still Have Limits
An as-is addendum means the seller will not make repairs or offer credits based on the inspection findings. The buyer can still inspect, and can still cancel under the contingency, but the seller has declared up front that no money is coming from their side.
What an as-is clause does not do is erase the duty to disclose. In most states, sellers must tell buyers about material defects they know about, even in an as-is sale. The label covers repair obligations only. A seller who stays silent about a leaking foundation or a flooding history can face a fraud or misrepresentation claim after closing, regardless of the as-is language in the contract.
Repairs the Seller Pays For Regardless of Negotiation
Some obligations sit outside the inspection negotiation entirely. For any home built before 1978, federal law requires the seller to disclose known lead-based paint hazards, provide any available inspection reports, and give the buyer a ten-day window to conduct a lead risk assessment before the contract becomes binding.1Office of the Law Revision Counsel. 42 U.S. Code 4852d – Disclosure of Information Concerning Lead Upon Transfer of Residential Property The contract must also include a specific signed Lead Warning Statement.2eCFR. Part 35 Lead-Based Paint Poisoning Prevention in Certain Residential Structures
At the state and local level, most jurisdictions require working smoke detectors and carbon monoxide alarms before a home can change hands. Many require sellers to resolve open building permits or active code violations before the deed can be recorded. The seller almost always bears these costs because the obligation attaches to the transfer of title, not to the inspection negotiation.
When the Lender Forces Repairs
Even when buyer and seller agree to skip repairs, the lender can override both of them. Government-backed loans impose minimum property requirements the home must meet before the loan funds. If the appraiser flags deficiencies, the deal stalls until someone pays to fix them.
FHA Loans
FHA financing requires the property to be safe, structurally sound, and habitable. The appraiser checks for hazards like exposed wiring, non-functional plumbing, inadequate heating, peeling paint on pre-1978 homes, and foundation problems.3U.S. Department of Housing and Urban Development. FHA Single Family Housing Policy Handbook 4000.1 When deficiencies are flagged, the appraisal is issued “subject to” the completion of specific repairs. The loan cannot close until the work is done and the appraiser re-inspects to verify. FHA also caps seller contributions toward buyer closing costs at six percent of the sale price, which constrains how much of the repair burden can be shifted through credits.
VA Loans
VA appraisals require working electrical, heating, and cooling systems; adequate roofing with reasonable remaining life; clean water supply; safe sewage disposal; and properly vented attics and crawl spaces. On homes built before 1978, chipping or peeling exterior paint must be remediated before closing because it’s presumed to contain lead. The VA appraiser also checks for wood-destroying insects, and evidence of infestation triggers a required pest inspection and treatment before loan approval.
USDA Loans
USDA Rural Development loans require a whole-house inspection by a state-licensed inspector covering five areas: termites and pests, plumbing and water, heating and cooling, electrical, and structural soundness.4U.S. Department of Agriculture. HB-1-3550 Chapter 5 Property Requirements Deficiencies that drop the home below decent, safe, and sanitary standards must be addressed either by seller repairs before closing or through a post-closing repair plan built into the loan.
Who Actually Writes the Check
The lender doesn’t care who pays. It only cares that the work gets done. In practice this becomes a high-pressure negotiation because neither party can walk away from the requirement: the seller knows the buyer can’t close without the repairs, and the buyer knows the next buyer with the same loan type will trigger the same appraisal findings. Deals usually split the burden, with the seller handling the physical work and the buyer giving up ground elsewhere, often through a slightly higher price or fewer credits.
Credits and Price Reductions Instead of Fixing Things
When repairs can’t realistically be finished before closing, or when the seller doesn’t want to manage contractors, a financial workaround is common. There are two main forms.
A closing cost credit is a dollar amount the seller pays at closing to offset the buyer’s settlement charges. A $3,000 credit appears as a line-item credit on the Closing Disclosure.5Consumer Financial Protection Bureau. TILA-RESPA Integrated Disclosure FAQs The buyer brings $3,000 less cash to the table and uses the savings to pay for repairs after moving in.
A price reduction works differently. The sale price itself drops. A $300,000 home with a $5,000 reduction closes at $295,000, which lowers the loan amount, the monthly payment, and the total interest over the life of the mortgage. For large repair issues, a price cut can be worth more to the buyer than an equivalent credit.
Both have ceilings. FHA caps total seller concessions at six percent of the sale price. Conventional loans impose their own caps that vary by down payment. The buyer’s lender will reject anything above those limits, so confirm the ceiling with the loan officer before agreeing to a number.
Escrow Holdbacks for Repairs After Closing
Some repairs genuinely can’t finish before closing. Seasonal work like exterior painting in winter, contractor scheduling, and permits that take weeks can all create legitimate timing problems. An escrow holdback sets aside a portion of the seller’s proceeds in an escrow account held by the closing agent and releases the money only after the repair is verified complete.
The standard practice is to hold back more than the estimated cost so the seller has an incentive to finish. Holding 1.5 times the quoted price is common: a $2,000 repair means $3,000 in escrow, with the surplus returned when the job is done. If the seller misses the deadline, the funds typically go to the buyer to hire a replacement contractor.
Fannie Mae has its own rules for loans it purchases. Minor conditions that don’t affect safety or structural integrity can be escrowed at the lender’s discretion. For larger postponed improvements, Fannie Mae requires the lender to hold back 120 percent of the estimated cost, and the work must be completed within 180 days of the loan’s note date.6Fannie Mae. Requirements for Verifying Completion and Postponed Improvements Leftover funds must be applied to reduce the loan’s principal rather than returned to the seller.
What Changes if You Waive the Inspection Contingency
In competitive markets, buyers sometimes waive the contingency to strengthen an offer. The cost is giving up the ability to renegotiate based on inspection findings or to cancel and recover the earnest money if the inspection turns up something serious. The buyer is effectively agreeing to buy as-is from the seller’s perspective.
You can still hire an inspector for your own information, but the results carry no contractual leverage. A $15,000 foundation problem becomes your problem, or you walk away and lose the deposit. Some buyers compromise by shortening the contingency window instead of eliminating it, which gives the seller a faster timeline without stripping the buyer of all protection.
Verifying the Repairs and Recourse if They Fall Short
Agreement on repairs means nothing if the work isn’t done, or isn’t done well. A re-inspection is the standard check: the original inspector reviews the sales addendum, returns to the property, and confirms whether each agreed-upon item appears complete. Re-inspections don’t evaluate craftsmanship or guarantee durability, but they catch obvious shortcuts. They typically start around $250 and can run as high as the original inspection fee. Schedule them well before the contingency deadline, because a missed deadline can cost you your leverage or the deal.
For work done by licensed contractors, ask the seller for receipts, any required permits, and warranty documentation. If an escrow holdback is in place, these documents are usually required before funds release.
Once the deed transfers, the buyer generally owns every problem in the house. The inspection period is what prevents that outcome from being unfair. A few exceptions survive closing: if the contract required specific repairs and the seller didn’t do them, the buyer has a breach of contract claim; if an escrow holdback was established and the seller missed the deadline, the held funds should release to the buyer automatically under the holdback agreement; and if the seller actively concealed a known defect or lied on the disclosure form, the buyer may have grounds for a fraud or misrepresentation claim.