Some projects aimed at improving a residential property can be a smart investment because they increase the perceived market value for buyers. Other times, sellers have to make repairs because the mortgage company requires them or they have negotiated an arrangement with the buyer. An issue with the inspection could also lead to a big project taking place right before a home closing occurs.
Sellers may want to complete projects – or at least time a contract for a major project that may occur in a few weeks – before they list a property for sale. Sellers who are managing contractor projects with a closing deadline looming will typically need to keep the following concerns in mind.
They need to work with insured professionals
Every community has a number of fly-by-night handymen and contractors that fail to obtain the licensing and insurance that they need to legally and safely do their jobs. If those contractors do a poor job or damage the property in some way, their insurance coverage may be the only way for the seller to avoid claims that could derail the closing or decrease what they earn from the transaction.
They may need buyer input or involvement
Especially if the project will involve retouching some of the finishes in the home, it certainly makes good sense to involve the buyer and allow them to provide their input. They may have certain preferences that the contractor can integrate while completing the project. Communication with the buyer can also potentially benefit them by making them eligible for the warranty if one applies.
They need a written contract with a specific timeline
If the contractors don’t finish the project before closing, that might lead to a delayed schedule for the closing and occupancy transition for the property. Therefore, it is of the utmost importance to schedule the project carefully so that it will be complete before the closing or there is at least a firm timeline for when the work will be done. The more communication and transparency sellers provide when a project is an important part of the closing process, the less likely hiccups with property repairs are to impact the real estate transaction.
Properly managing contractor services while preparing for a home closing may be an important part of facilitating the smooth transfer of the home to its new owner. Seeking legal guidance, as needed, can help to better ensure the success of a transaction overall.