Sellers more willing to make repairs

Q: I signed a contract to buy a home and made my offer contingent on first getting a satisfactory report from a professional home inspector. The inspection report says that there is a “major leak” in the pipes that are under the floor in the kitchen and that I should have the pipes replaced. Is the seller required to replace the pipes at her own expense to close the sale?

A: No, the seller isn’t legally obligated to install new plumbing in order to close the sale. But she’d be smart to consider paying for some or all of the needed repairs, now that the housing market has cooled and sales are soon expected to enter the typical winter doldrums.

You were wise to make the purchase contingent on obtaining a satisfactory report from a professional inspector. In most cases, a typical inspection contingency allows buyers to cancel a sale and get their deposit back if the report uncovers previously undetected problems.

Including a contingency in an offer does not, however, obligate a seller to fix any problems that the inspector may find: The seller simply can cancel the sale and return the buyer’s deposit, or complete the transaction by agreeing to pay for the repairs.

The buyer and seller could agree to either lower the sales price or have the seller provide a credit on the day the deal closes, so that the buyer will have the money to make the repairs after moving in.

When most housing markets were red hot a year or two ago, buyers didn’t have much power with sellers when an inspection uncovered problems; with prices in some communities rising as much as 5 percent per month, it often didn’t make sense to try to renegotiate with a seller over a few thousand dollars worth of repairs.

But now that home sales and prices have cooled, savvy buyers are pressing sellers to pay for most or all needed repairs themselves. If a seller won’t renegotiate, you probably can find a different property that’s in better shape and offered by a seller who’s more willing to bargain.

Q: We are planning to refinance. My husband receives $650 per month for a permanent disability. Can we include that $650 as “income” on our loan application to improve our chances of getting the mortgage?

A: Yes, you can list the disability payments on your mortgage application, and the lender must consider it as income when making its loan decision.

Banks generally are under no obligation to consider short-term disability payments that will end in the foreseeable future.

However, federal law requires banks to consider permanent disability payments when reviewing a customer’s application in much the same way that they must consider payments from the Social Security Administration.