Sellers do not have to fix everything on a home inspection report. A home inspection is a diagnostic tool for the buyer, not a mandatory to-do list for the seller. Whether any particular item gets repaired comes down to three things: what the purchase agreement says, what kind of loan the buyer is using, and what state disclosure law requires. Everything else is negotiation.
Disclosure Is Not the Same as Repair
Most states require sellers to complete a disclosure form listing known material defects before closing. A material defect is anything that could meaningfully affect the home’s value, safety, or livability: foundation problems, water intrusion, pest damage, electrical hazards, and similar issues. The operative word is “known.” Sellers have to be honest about problems they’re aware of. No state requires them to go looking for defects, and disclosure laws don’t force them to repair what they disclose.
One federal rule applies everywhere. For any home built before 1978, the seller must inform the buyer about known lead-based paint or lead-based paint hazards before the contract is signed, hand over any available reports, and provide the EPA pamphlet “Protect Your Family From Lead in Your Home.” Buyers get at least 10 days to arrange their own lead paint inspection. The rule does not require the seller to test for or remove lead paint.1eCFR. 24 CFR 35.88 – Disclosure Requirements for Sellers and Lessors
The pattern holds across residential real estate: sellers must tell the truth about what they know, but honesty and repairs are separate obligations. Repair responsibility almost always comes from the contract.
The Inspection Contingency Is Where the Leverage Lives
Most residential purchase agreements include an inspection contingency. It gives the buyer a defined window to hire an inspector, review the report, and decide how to proceed. If problems turn up, the buyer can request repairs, ask for a price reduction or closing credit, or walk away with their earnest money.
The length of that window varies. Some contracts set it at 10 days, others at 17 or more, and the parties can negotiate a custom period. Once the contingency expires, the buyer usually loses the right to make repair demands or exit the deal penalty-free based on inspection findings. Missing the deadline is one of the more expensive mistakes buyers make.
Without an inspection contingency, or when a buyer waives it to strengthen an offer, the seller has almost no obligation to address what an inspection finds. Waiving the contingency effectively turns the deal into an as-is purchase, whether the contract uses that word or not.
How Repair Negotiations Usually Go
After the inspection, the buyer submits a formal repair request. Experienced agents generally advise focusing that request on safety, structural, and major-system issues: foundation cracks, roof failure, unsafe wiring, active water intrusion. Asking a seller to repaint scuffed walls, tighten a squeaky door, or swap dated fixtures rarely lands well, and stuffing the list with cosmetic items can push the seller to dig in on everything.
The seller can respond in a few ways:
- Agree to complete the requested repairs, typically with licensed contractors, before closing.
- Offer a credit at closing so the buyer can handle the work after moving in.
- Counter with partial repairs, agreeing to some items and declining others.
- Refuse to make repairs or offer any credit.
None of those responses is inherently unreasonable. The outcome depends on the local market, the severity of the findings, and how motivated each side is. In a strong seller’s market, buyers have less room to push. In a buyer’s market, sellers who refuse basic safety repairs risk losing the deal.
What to Do If the Seller Refuses
A flat refusal doesn’t leave the buyer stuck, as long as the inspection contingency is still active. Narrowing the request often helps: dropping cosmetic items and focusing only on health and safety concerns can break a standoff. So can restructuring the ask — a closing cost credit instead of physical repairs, a home warranty covering major systems, or flexibility on the closing timeline in exchange for a concession.
If none of that moves the seller, the buyer has two remaining options. Accept the property as it stands and budget for repairs after closing, ideally after getting contractor estimates so the real cost is on the table. Or exercise the inspection contingency to terminate the contract, which typically protects the earnest money. Many buyers forget that second option exists, especially after weeks of emotional investment in the transaction.
Government-Backed Loans Can Force the Issue
When the buyer is financing with an FHA, VA, or USDA loan, the property itself has to meet minimum condition standards before the lender will fund the mortgage. That shifts repairs from optional to required, and in practice the seller usually has to make them.
FHA Loans
The Federal Housing Administration requires properties to meet HUD’s Property Acceptability Criteria, which come down to three principles: safe, structurally sound, and sanitary. An FHA appraiser flags anything that falls short. Common items that must be corrected before closing include functional electrical, plumbing, and HVAC systems; a roof with at least two years of remaining useful life and no active leaks; safe potable water and working sewage; a foundation free of significant cracks or settlement; and, in pre-1978 homes, any chipping or peeling paint. Repairs have to be completed and verified before the loan can close.2HUD. HUD Handbook 4000.1 – FHA Single Family Housing Policy Handbook
VA Loans
The Department of Veterans Affairs applies Minimum Property Requirements that follow the same safe, sound, and sanitary framework. A VA-assigned appraiser checks the property for working electrical, heating, and cooling; a roof with adequate remaining life; clean and continuous water; sanitary sewage disposal; freedom from wood-destroying insects and lead-based paint; properly vented attics and crawl spaces; and year-round access from a public or private road.3VA Home Loans. VA Basic MPR Checklist
USDA Loans
USDA Rural Development loans require the home to be “structurally sound, functionally adequate, and in good repair.” A state-licensed inspector must confirm the property passes on five fronts: pest infestation, plumbing and water, heating and cooling, electrical, and structural soundness. If deficiencies come up, the seller typically has to complete repairs before closing, with receipts and permits documenting the work.4USDA Rural Development. HB-1-3550 Chapter 5 – Property Requirements
The practical takeaway for sellers: with a government-backed loan on the other side of the table, certain repairs are no longer negotiable. The loan won’t close until the property meets the program’s standards, regardless of what the purchase agreement says.
Credits Instead of Repairs
A closing credit lets the seller contribute money toward the buyer’s closing costs in place of doing the repairs themselves. Sellers often prefer this because it avoids hiring contractors and managing work on a deadline. Buyers often like it because they can pick their own contractors afterward.
Credits have limits. For conventional loans backed by Fannie Mae, the cap depends on the buyer’s down payment:
- Less than 10% down: up to 3% of the sale price or appraised value, whichever is lower.
- 10% to 25% down: up to 6%.
- 25% or more down: up to 9%.
- Investment properties: up to 2%, regardless of down payment.
Credits can only cover closing costs and prepaid items like tax and insurance escrows. They cannot go toward the down payment, and the lender will not let excess credit come back to the buyer as cash.5Fannie Mae. Interested Party Contributions (IPCs) – Fannie Mae Selling Guide If the negotiated credit exceeds actual closing costs, the excess is wasted. If the home appraises below the sale price, the credit is calculated off the lower figure. Both sides should run the numbers before choosing a credit over a straight price reduction.
What Changes in an As-Is Sale
An as-is sale means the buyer agrees to take the property in its current condition without expecting repairs or credits based on inspection findings. Two things do not change. The seller still has to disclose known material defects, and the federal lead-paint rule still applies to pre-1978 homes.6US EPA. Lead-Based Paint Disclosure Rule Fact Sheet The buyer also keeps the right to inspect the property, and unless they specifically waive the inspection contingency, they can still walk away based on what the inspector finds.
For buyers, as-is pricing has to account for repair costs. A home listed as-is at $280,000 with $30,000 in needed work has a real starting cost of $310,000.
Radon and Environmental Findings
Some inspection findings involve environmental hazards where federal agencies have set clear action thresholds without requiring remediation. Radon is the most common. The EPA recommends mitigation at 4 picocuries per liter (pCi/L) or higher, and suggests homeowners consider action between 2 and 4 pCi/L, noting there is no known safe exposure level.7US EPA. What is EPA’s Action Level for Radon and What Does it Mean?
A reading above 4 pCi/L doesn’t legally compel a seller to install a mitigation system, but it gives the buyer real leverage in negotiations, and lenders for government-backed loans may flag it during underwriting. Mitigation systems for most homes run from a few hundred to a couple thousand dollars.
Verifying Repairs Before You Close
When a seller does agree to make repairs, the work isn’t done until the buyer confirms it. The final walkthrough is the last chance to check. Ask for receipts, invoices, and permits for every agreed-upon item. Work done by licensed contractors with documented permits carries far more weight than a seller’s assurance that someone handled it.
For significant repairs, paying the original inspector for a re-inspection is usually worth it. An inspector can verify the work actually addresses the deficiency rather than cosmetically masking it. If repairs aren’t finished or don’t meet the standard the contract described, the buyer can hold up closing until they are. After closing, that leverage is gone.