Real Estate

The repair cap in the real estate contract

What is a repair cap?

How much should I ask for?


After a buyer gets an offer on a house accepted, the next step is to get a home inspection. The home inspector will check the roof and the foundation and all mechanical features in between. It seems like every house has something that needs to be repaired. Sometimes the buyer may have noticed some repairs but most of the time the home inspector uncovers defects in the house.

The repair cap is a dollar amount in repairs that the seller has agreed to repair. The amount of repairs that the inspector uncovers may be more or less than the repair cap. If the repairs are less than the repair cap, the seller will repair all items listen on a TRR form (Treatment, Repair, & Replacement). If the repairs are more than the repair cap, then there are a few different scenarios that could happen.

1.         The buyer decides which repairs are most important to them and ask the seller to repair those items up to the dollar amount.

2.         The buyer asks the seller to repair items that cost more than the repair cap and the seller agrees to make repairs. Contract continues as normal.

3.         The buyer asks the seller to repair items that cost more than the repair cap and the seller refuses to make certain repairs. This is sometimes called the second negotiation.  If buyer and seller cannot agree, the contract becomes null and void. If they can reach an agreement, then the contract continues as normal.


The repair cap is listed in the contract to protect both buyer and seller. It may be that the seller cannot afford to make the repairs beyond the repair cap, or the buyer may decide after seeing the inspection report that they do not want to purchase the house especially if there are many repairs and the seller is not willing or able to make necessary repairs.

Once the seller knows the list of repairs they are required to disclose this information to future buyers; however, the seller may still decide to not repair more than the repair cap amount.

So how much should a buyer put in the contract for a repair cap. This is always a tough question, since it is unknown what the inspector will find prior to the inspection. I typically see $500-$1000 in contracts. If the house is newer probably less is fine, if the house is older or very large, then maybe more. I suggest you visually inspect the roof, windows, look for cracks, turn lights on and off and maybe turn the sink on and look under the sink. Does it look like the property has been maintained? If you see major issues like missing shingles or broken windows, ask the seller to repair these items outside of the repair cap. This way you don’t find yourself outside of a repair cap with a seller not willing to make a large repair and you out the money of the inspection when you knew going in that there was a large repair that you were not willing to make was required.

If you have questions regarding real estate, please feel free to call me at 405-213-2992 or visit my website at

Real Estate

The appraiser is not a home inspector

People always want to know if a house will go FHA or VA. If the buyer is getting a VA loan, they comment on the VA inspection. So let’s set a few things straight. There is no FHA or VA inspection so to speak. There is simply a home inspection and an appraisal.

While the buyer pays for the appraisal, the appraiser is hired by the bank to verify that the collateral (the house) is adequate for the amount of money that they are loaning the buyer.

If the loan is a FHA or VA loan, then the appraiser is required to verify that the house is safe, sound and secure; meaning that the exterior doors are solid core, the hot water tank is up 18” in the garage, no peeling paint and no broken windows or exposed wires., etc.

I would not expect the appraiser to climb on the roof, in the attic, or under the house. The appraiser does not get a copy of the home inspection.

As long as the appraiser does not require any repairs prior to closing or the seller is willing to make the required repairs, the house will go FHA or VA. This does not mean that there are no mechanical issues with the home.

The home inspector is hired by the home buyer to inspect the property. The home inspector should climb on the roof, check the structure, and look for electrical, plumbing issues as well as check the heat and cooling system. This inspection should be extensive and if concerns are found that are more extensive than the home inspector’s expertise, then further inspections may be recommended by licensed professionals. Regardless of what the home inspector finds during his inspection, the buyer may or may not choose to buy the house. This is not a pass, fail inspection. The inspector’s job is to identify the mechanical aspects of the house that are not functioning.

The buyer may ask the seller to repair some or all of the repairs that the home inspector has discovered. In the purchase contract, the buyer requested that the seller repair up to a certain dollar amount. If the repairs are more than the dollar amount in the contract, the seller may not want to make the repairs requested by the buyer. If that happens, the contract may bust.

The home inspection is important for the buyer because it tells them exactly what they are buying. It has been my experience that most buyers do not climb under the house or in the attic prior to making an offer. And even if they did a majority of them would not know what they were looking at; therefore, it is vital that they get a home inspection, so they can make an educated purchase.

If you have real estate questions please feel free to call me at 405-213-2992 or visit my website  I would love to help you with all your real estate needs.