Prompted by a spate of buyers and real estate lawyers who were misusing the time allotted for negotiating over flaws that a home inspector finds—the time to ask for roof repairs, boiler replacements and other substantial repairs—the contract revisions clarify that after the inspection is not the time to request that old wallpaper be replaced or moldy window treatments cleaned.
The aim of the changes was not to take away buyers’ opportunity to have the seller make cosmetic changes, but to clarify that there’s a time for that: when submitting an offer on the property, say two people who were on the committee of about two dozen who revised the Multi-Board Residential Real Estate Contract. The contract has been rolling out in recent weeks and becomes the standard March 1.
The post-inspection phase has always been the time to negotiate over substantial problems with mechanicals, climate systems or the roof that an inspection turned up. But in recent years, “we’ve been seeing sellers get these never-ending lists of everything the inspector noticed,” said Dave Naso, managing broker at Keller Williams Chicago-Lincoln Park and a Chicago Association of Realtors board member who also worked on the revision committee.
“Just because some light bulbs are burned out that doesn’t mean you request that they be changed,” Naso said. “We’ve clarified what can and can’t be requested.”
As revised, section 12 of the contract says “the request for repairs shall cover only the major components of the real estate,” and lists them: plumbing, electrical system, roof, foundation and others. “Minor repairs do not constitute defects,” the contract now says. A seller who receives a list of demands for cosmetic changes at this stage of the negotiation, the contract stipulates, can “declare this contract terminated.”
The inspection typically comes after the seller accepts an offer, and post-inspection demands should be “the types of problems you really couldn’t ascertain for yourself when you go and look at the property with your agent and put it under contract,” said Neil Narut, senior underwriting counsel for Chicago-based Proper Title.
Attorneys for the buyers may have taken the position that “you might as well ask,” Narut said, but it’s not entirely fair to sellers to have to field a list of minor improvements at a relatively late stage in the negotiation process.
While there’s no solid count of how many buyers have been using the post-inspection phase to ask for cosmetic changes, these industry sources all agreed that it has become common enough in recent years that nipping it in the bud was called for. In meetings called to revise finer legal points in the contract, Naso said, “we’re sitting at a table and everyone has examples of buyers doing this.”
The most egregious misuse of the post-inspection window, Diamond said, involved buyers in the western suburbs last year whose inspector discovered that the pull chains on the home’s ceiling fans were too short. They requested that the seller put in longer chains before they would agree to close the deal.