By making it a credit for closing costs you ate merely naming your credit something that is acceptable to the lender.
If the lender sees repairs need to be done, they will ask it to be done as it is the lenders collateral and a credit for repairs takes value from the house.
It is done every day all day. It is perfectly legal.
Without looking at the contract, I agree with Tiffany. It seems that the buyer is looking for free monies in the form of repairs to go towards his/her closing costs. If you really want to close the offer, don.t waive the termite inspection. This is to protect your self. Depending on the size and age of the home, it should not cost more than $200. This is a disclosure.
You may want to bargain on the repairs cost to be credited. Check with your agent. Although it is a sellers' market. but if all costs suit you go ahead with the close.
Try to get the details from your listing agent as to the reason why there was a change in your previous agreement.
If the termite repairs or extermination's cost is around thousand dollars, and the buyers wanted you to give her/him the money instead as credit towards closing costs, my presumption is that the buyers need more funds for the closing.
However, this is just my presumption and you should proceed with caution. Paying $200 for termite clearance well in fact the termites have not been treated does not look right.
It sounds simply that the buyers no longer need the termite clearance (if they are requesting waiving it) but that they still want the credit. Correct? If so, than your agent may not be looking out for your best interest if your being pressured to sign something.
By they way, this is a sellers market- in other words your in control, not the buyer. You can request just about whatever u want and a buyer out there will probably be willing to comply.
I would request that your agent be more specific as to where the money is going. Make sure he specifies to you what recurring closing costs are exactly (taxes, so ur paying a portion of the buyers taxes) and what non-recurring closing costs will be paid as well.
Just ask for more detail about the entire modification to terms that your being asked to sign. Down to the dollar difference.
Pacific Sotheby's International Realty
CA BRE Lic # 01413799
So the fact that you and the buyer are both waiving the termite report and clearance is actually better for you in that there is no liability associated with the termite work, repairs, etc - and there is nothing that needs to "happen" in order for the transaction to close. The buyers can do the work after closing (or they dont have to) - and it becomes their responsibility. The fact that you are crediting them for "closing costs" - just means they have to bring less money into the transaction to close - and they "should" use that money that they received in lieu of the termite repairs - toward the termite repairs after closing. (So it's a Wash).
Lending guidelines typically do not allow for a credit for repairs (termite or otherwise). This just opens up a can or worms that you dont want opened as a seller (or a buyer). If this transaction were mine, as an agent, I would handle it the same way - and I do - often times. I typically will counter out the termite altogether from the get-go (and provide a termite report to the buyer as a disclosure only) - but since that didn't happen, this is the next best way to make everyone happy. Good luck and congratulations on your sale!
If the Buyer chooses to accept the property without termite clearance and their bank/lender will allow that then it doesn't effect you in any way. If the "credit" amount is the same or less than the termite work required for clearance then it's completely fine.
Meridian Capital Real Estate
Cory La Scala, REALTOR
Lic # 01443391