Seller Repair Addendum: When to Complete Repairs & What Happens If You Don’t

After your buyer does their home inspection and you’ve both agreed to a seller repair addendum, one of the first questions sellers ask is: when do I actually need to get this done? Start too soon and you risk completing repairs for a buyer who backs out. Wait too long and you might miss your closing date. Getting the timing right matters, and so does knowing what happens if the repairs don’t get finished on time.

What Is a Buyer’s Repair Addendum?

A seller repair addendum is a formal document added to the purchase contract that outlines the specific repairs a seller has agreed to make before closing. It typically comes out of the buyer’s option period, during which they may request certain repairs, improvements, or credits based on the home inspection. Once both parties sign the addendum, those agreed-upon repairs become a contractual obligation. Failing to complete them on time can have real consequences, which we cover below.

When Should You Start the Repairs? A Step-by-Step Timeline

There are several milestones in a typical real estate transaction where a buyer could still back out. Waiting until those milestones have passed before spending money on repairs is the smart way to protect yourself as a seller.

Step 1: Wait Until the Buyer’s Option Period Has Ended or Been Waived

In Texas, buyers negotiate an option period, typically 5 to 10 days, during which they can cancel the contract for any reason and get their earnest money back. Agreeing to a seller repair addendum does not mean the buyer has given up their option to cancel. Unless the buyer expressly waives their option period in writing, they can still walk away even after you’ve shaken hands on the repair list.

Hold off on scheduling contractors until the option period has expired or the buyer has provided a written waiver. This is the single biggest risk window for sellers.

Step 2: Wait for Financing Clearance

If your buyer is getting a loan, they likely have a financing contingency that allows them to cancel the contract if they can’t secure the loan described in the Third Party Financing Addendum. Not securing financing is the second most common reason buyers terminate a purchase contract. Waiting until the buyer has received loan approval before completing repairs gives you significantly more confidence the deal will actually close.

Step 3: Wait for the Appraisal

The appraisal is typically the last major hurdle before closing where a buyer might try to renegotiate. If the home appraises below the contract price, buyers often ask for a price reduction. If the seller won’t reduce the price, the buyer may have grounds to walk based on the property approval contingency, which runs all the way through closing. To be conservative, wait until the appraisal has come back at or above value before completing repairs.

Step 4: Factor in Contractor Availability

If your repairs are minor, such as a leaky faucet, a broken outlet, or a door that won’t latch, you can reasonably wait until after all three milestones above have passed. But if repairs are more extensive, like HVAC work, roof patches, or any kind of structural concern, contractors may be booked out days or even weeks in advance. Start reaching out for bids and getting on contractor schedules early, even if you don’t commit to the work until the right moment. Missing your closing date because a contractor couldn’t fit you in is an avoidable problem with a little planning.

Pro Tip: Ask the Buyer to Waive Their Option in Exchange for Repairs

If you’re in the middle of repair negotiations, consider asking the buyer to waive their remaining option period as part of the seller repair addendum negotiation. The option period exists so buyers can investigate the property and negotiate repairs. Once both sides have settled on what’s being fixed, asking the buyer to formally commit to the purchase is a reasonable ask. Your agent can include a written option waiver as part of a counter addendum.

What Happens If Repairs Aren’t Done Before Closing?

Unless otherwise stated in your seller repair addendum, all repairs must be complete before closing. That said, life happens — contractors miss deadlines, parts get back-ordered, and schedules slip. If your repairs aren’t finished in time, here are the four most common ways sellers and buyers resolve it.

Option 1: Delay Closing

If a seller can show they’re actively completing repairs, the buyer may agree to push the closing date back. Delays typically range from 5 to 30 days. This works best when the work is genuinely in progress and there’s a clear end date in sight. Factor in any additional housing or storage costs you or the buyer might incur from the delay.

Option 2: Escrow Holdback

In an escrow holdback, the title company holds a portion of the seller’s proceeds, typically 150% of the estimated repair cost, until the repairs are completed after closing. Once finished, the seller provides proof and receives the held funds. Not all lenders allow this arrangement, so check with your agent and the buyer’s lender before agreeing to it.

Option 3: Closing Credit or Price Reduction

Rather than completing the repairs yourself, you may be able to give the buyer a credit at closing equal to the estimated cost of the work. The buyer then handles the repairs after taking ownership. This is often the cleanest solution when timing is tight. A price reduction can also work well — and it may actually be more attractive to the seller since it lowers the commission, which is calculated as a percentage of the total sale price.

Option 4: Buyer Terminates the Contract

If a seller refuses to complete repairs, provide a credit, or agree to a delay, the buyer may have grounds to terminate the contract. Failing to complete agreed-upon repairs in a good and workmanlike manner by the specified deadline is a breach of contract. This outcome is bad for everyone. The best way to avoid it is clear communication and getting ahead of contractor scheduling early.

Special Considerations for FHA and VA Loans

If your buyer is using FHA or VA financing, be aware that these lenders have their own property condition requirements that go beyond what’s negotiated in a repair addendum. FHA and VA appraisers flag health and safety issues — things like peeling paint on older homes, missing handrails, non-functional systems, or roof damage — and the lender may require those items to be repaired as a condition of approving the loan.

This can mean repairs you didn’t anticipate showing up late in the transaction. If you know your buyer is using FHA or VA financing, ask your agent upfront what types of issues appraisers in this program typically flag so you have time to prepare.

How to Document Completed Repairs

Documentation protects you. Most seller repair addendums require that work be completed by a licensed professional, and buyers will ask for receipts as proof before closing. Here’s how to handle it:

• Use licensed contractors: For anything beyond minor cosmetic work, use a licensed and insured contractor. You can verify a contractor’s license on the TDLR website before hiring. Receipts should show the work performed and the contractor’s license number.
• Pull permits where required: For major work such as electrical panels, HVAC replacements, or structural repairs, permits may be required by your city or county. Unpermitted work can cause issues during the final walkthrough and create problems for the buyer’s lender.
• Deliver receipts at least 3 days before closing: Give the buyer’s agent receipts well before the closing date so both sides have time to review them without creating a last-minute delay.
• Expect a final walkthrough: Buyers typically do a walkthrough 24 to 48 hours before closing to confirm repairs are complete. If something isn’t done at that point, you’ll be having a difficult negotiation on a very tight timeline.

This guidance is intended as general information for a typical Texas transaction and is not legal advice. Every transaction is different. Consult your Realtor or a real estate attorney for questions specific to your situation.

Frequently Asked Questions

Need to Sell Your Austin Home?

Repair negotiations are one of the trickier parts of selling a home, and one of the places where having an experienced agent in your corner makes a real difference. At Eleven Oaks Realty, we know how to negotiate hard on your behalf, coordinate with contractors, watch every contingency deadline, and keep your transaction on track from contract to close.

To learn more about our comprehensive Austin home selling program, check out our Austin Home Sellers page. Then fill out our Seller Survey, call us at (512) 827-8323, or email us at info@11OaksRealty.com to schedule a no-obligation consultation.