Home Buying in Chicago>Question Details

ChiBuyer, Home Buyer in Chicago, IL

What are a buyer's rights when the seller has not completed agreed upon repairs at closing?

Asked by ChiBuyer, Chicago, IL Tue Jun 25, 2013

We are not in a position to walk away or extend the closing with out losing our mortgage rate lock. Can the seller refuse to make repairs and walk away? What options do we have beyond holding money for repairs in escrow and requiring the seller to pay our rate lock extension fee (if we can even do that)? We are going to be going into a difficult closing and I would like to have the upper hand. Neither our agent or attorney have been very helpful.

Help the community by answering this question:


Hi, ChiBuyer:

You already should have the upper hand in this situation, provided your attorney has conducted the approval and inspection period of the contract correctly. Typically, the attorney's approval and property inspection contingency period continues until all repairs are made to the satisfaction of the purchaser.

The buyer's attorney should make this request before the buyer's mortgagee calls in the appraiser to determine the home's value. Any other order of events would just waste time and money.

If the repairs are not made by a certain date, you can try to agree with the seller on a cash settlement amount to cover the cost of the repairs. I usually recommend this method to my buyer clients, since they then can select their own contractors and have the work done to their own satisfaction.

Sellers also oftentimes prefer this method to having repairs done before closing, to avoid any disputes about workmanship. Make such a proposal to the seller if you still want to save the deal.

My question to you is this: what is the value of the repairs you requested? Is it in the hundreds, thousands, tens of thousands? Depending on the answer to this question, you may be better off doing the repairs yourself (if the seller won't give a credit at closing for the cost), if you really like the property and expect to stay in it for a longer period of time. With property values now rising in Chicago at a steady rate, the increase in equity you'll experience will probably outweigh the repair costs, as long as they're not in the tens of thousands.

As for your mortgage rate lock, look at the time it will take to recover the extra fee by comparing your current rate with the new (probably somewhat higher) rate. How much will the mortgage company charge you to keep your current rate? What is the difference in the proposed monthly payments under the current rate and new rate, and after paying the fee, how many months would you have to keep the current rate to break even, given the difference?

So the most important question for you is -- how much do you really like this property? Is there another one that could meet your needs that might have fewer repairs (or a more agreeable seller)?

Once you can answer these questions, you'll know what to do. I agree with my colleagues that litigation is not a good idea. Reserve that option for only the most serious of financial grievances. This doesn't seem to be one of them.


Don Pasek, CIPS, TRC, ADPR
Omniterra Real Properties
1 vote Thank Flag Link Tue Jun 25, 2013
Thanks for your detailed reply. We did not have the repairs done before the appraisal and i wish i had known about that option. The repairs would be in the thousands, maybe low tens of thousands, and sadly, that is still less than what finding a new property in this market would cost us. The frustrating part is that they could get away with it, especially considering all of the other stress, inconvenience and expenses that they have already caused us. I feel like the process is broken when this can happen. I wish there were another property that met our needs!
Flag Tue Jun 25, 2013
Sorry that your agent or attorney have not been helpful. as others have stated, it is really the attorney's deal now. Why do they not want to do the fixes? Were they agreed to in writing? If they were then you can do probably do several things. Insist in writing that they be done. Try to negotiate in good faith for a credit at closing.Depending on the amount take them to small claims court after you close.

They most likely cannot walk away from the deal. If the fixes are too much and you do not want to bear those costs then you should be able to walk, but like many others have pointed out, how much do you want the home and can you find a better deal? Remember to factor in the higher loan costs.

Good luck.

Jeffrey Olichwier
Managing Broker
Patrick Jeffrey Realty
Chicago, IL
0 votes Thank Flag Link Sat Jun 29, 2013
Your attorney should require a credit for all the items that have not been repaired.
0 votes Thank Flag Link Thu Jun 27, 2013
Generally this is a legal issue that should be handled by the attorney. If proper legal steps have been taken up to this point it should be an issue that you can get resolved in your favor. If your attorney is not handling the situation to your satisfaction you should look into replacing them, this will probably end up costing you more money in legal fees but depending on the cost of the repairs may be worth it.
0 votes Thank Flag Link Thu Jun 27, 2013
Thanks for your reply. I wasn't sure who was responsible for making sure the repairs are taken care of, the realtor or the attorney. We are looking into getting a new attorney.
Flag Thu Jun 27, 2013
Neither have been helpful because they haven't given you the right answer you were looking for or neither have been helpful because they havens given you an answer at all? Which one is it?
0 votes Thank Flag Link Wed Jun 26, 2013
I don't feel like they have been doing everything that they can be. Neither one of them have been in a situation like this before, and I think they are at a loss about what to do.
Flag Wed Jun 26, 2013
Try to talk to the sellers via your Attorney, Realtor, or New Attorney.

Even though you may be right, suing them for specific performance of the contract may not be worth the hassle, headaches, and $$$!
0 votes Thank Flag Link Tue Jun 25, 2013
Yes, Indeed it is very frustrating. Look at the big picture - maybe the chaos on the seller's side, may create long term opportunity for you.
Flag Wed Jun 26, 2013
Thanks for your reply. The sellers aren't even talking to each other (nasty divorce) so it has made everything more difficult. I don't understand why we even have contracts if it is so difficult to have one upheld! Very frustrating!
Flag Tue Jun 25, 2013
You can seek an attorney and potentially file suit or save the headache which may net you no results and back out, find another property. A lawsuit would be for damages and you have to prove them, with no guarantees. Consider the attorney and court fees.

Sohail A. Salahuddin | Founder and Team Leader

Innovative Property Consultants Group | Sales and Leasing


Jameson Sotheby’s International Realty

425 W. North Ave. | Chicago, IL 60610 

O: 312.335.3230 | C: 312.437.7799 | F: 847.805.6030

"Extraordinary Service For Extraordinary Lives"
0 votes Thank Flag Link Tue Jun 25, 2013
Thanks for the reply. We have kept an eye out for other properties, but because inventory is so low, nothing has come up that suited our needs. Ultimately it will come down to us eating more costs unfortunately. I was just hoping we would have more rights as buyers. I have learned through this process that contracts don't really mean much if there is no good faith backing them. We are already living in temporary housing because they pushed back the closing date. Finding another property at this point would cost a significant amount more considering the rising rates and home prices, not to mention what we are already paying in storage and movers fees.
Flag Tue Jun 25, 2013
Its tough. You need to have your attorney file this against them. If they agreed to it in writing, then they have to do it or you can go after them. Then the question arises, is the cost worth the headache? I would simply try to be civil and see if it can get worked out.
0 votes Thank Flag Link Tue Jun 25, 2013
Thanks for your reply. We have tried being civil, and because of the situation (a nasty divorce), one of the sellers is more focused on making the other one miserable than being civil, and we are just caught in the middle.
Flag Tue Jun 25, 2013
That is sad if your attorney does not offer some legal advice. This is a legal issue. It is always difficult to ask the other side to make repairs etc because of what you are experiencing. We usually just do 'credits' and sell as is.
0 votes Thank Flag Link Tue Jun 25, 2013
I agree. Unfortunately, this situation is not the usual. Thanks for your reply.
Flag Tue Jun 25, 2013

If your attorney cannot or won't advocate for you, hire a new one. At the very least tell him/her to earn their pay.

Your options can include all of the items you mentioned as a recourse.

Good luck!
0 votes Thank Flag Link Tue Jun 25, 2013
Thanks. I wasn't sure if we could bring in a new attorney this far along in the process, especially since our current one has all of the documentation up to this point. It has been a difficult transaction, so it has been a little more involved than the usual process.
Flag Tue Jun 25, 2013
Are you receiving any closing cost credits prior to this point? If not, then that's the logical step if all of the required repairs haven't been made yet. I agree with Stacy...how do you know that the repairs haven't been or won't be made? When is the closing? Your team needs to make sure that you are covered. It shouldn't be an issue of extending the closing date.
0 votes Thank Flag Link Tue Jun 25, 2013
Thanks for the reply. See my responses to Stacy. I don't have any trust in our team at this point, unfortunately. This seller has been so unstable that I think everyone but us has given up, and that is because we need a place to live. They would not agree to any credits, only to make the repairs. I am just concerned that we will get in there and have to close because we need somewhere to live and that they will get away with not making repairs just because we need to close and they don't. Thanks again!
Flag Tue Jun 25, 2013
Try to work with seller in a good manner , and try to fix the situation you can close .... always with a positive attitude
0 votes Thank Flag Link Tue Jun 25, 2013
How do you know the repairs will not be done? You have a contract, and an attorney letter stipulating the repairs to be made prior to close. If they are not done by the walkthrough then you will negotiate how it will be settled at the closing table. I am sure that the seller wants to sell and not risk you suing for specific performance on the contract.
0 votes Thank Flag Link Tue Jun 25, 2013
I also think that she thinks that she can get more money for the house, and with the changing market, at this point she probably could, so she is not motivated to sell. It has been a mess from day 1 but we haven't come across a house that we like better, so we've been dealing with it.
Flag Tue Jun 25, 2013
We are anticipating that they won't be based on our experience with the seller thus far. The problem is that it is a divorcing couple and the wife either doesn't want to sell or is doing everything possible to make this difficult for the husband. It will not be surprising if we have our walkthrough and nothing has been done. We thought they had both already moved out, but she may be living there again. Thanks for your reply. Could we still close and then sue, or does closing signify that we accept the house as it is?
Flag Tue Jun 25, 2013
Your attorney is the go to for this information - consult a new attorney if your current counsel does not possess the skill set required to get you through this. Make sure you check with your lender to see if they will allow a deposit held in Escrow - most will not.
Good luck!
Sam Sharp
Senior VP of Mortgage Lending
Guaranteed Rate
773 290 0455
0 votes Thank Flag Link Tue Jun 25, 2013
Is it possible to switch attorneys this late in the process? Unfortunately, he is a friend so that will make it even more awkward. Thanks for your reply.
Flag Tue Jun 25, 2013
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