Short answerIt depends on the item and the buyer's loan. Lender required repairs usually must be done. For other items, a credit is often cheapest because the buyer manages the work, but lenders cap credits. A price reduction lowers your net dollar for dollar and helps most when the item affects value or a credit would exceed the cap.
| Option | Your cost | Best when | Watch out for |
|---|---|---|---|
| Repair | The contractor's price plus your time | Lender required items, cheap safety items, or work you can get done well and fast | The buyer may question the quality; keep receipts and use licensed trades where required |
| Closing credit | The credit amount | The buyer wants to choose the contractor and the item can wait | Each loan type limits seller credits; a credit cannot fix a lender required repair |
| Price reduction | The reduction | The item affects value, or credits are capped | The buyer's appraisal and loan amount change; it saves them little cash at closing |
A quick example
A buyer asks for a $3,500 credit for an older furnace. A contractor quotes $4,200 to replace it. A $3,000 credit, a $3,500 price cut, and a $4,200 replacement all close the item. On your settlement statement the credit costs least. If the buyer's loan caps credits, the price cut may be the only workable path.
Run your net each way: net proceeds calculator. Answering the request itself: how to respond to a repair request.
Frequently asked questions
Which option looks best to buyers?
Many buyers prefer credits so they choose the contractor. Lender required repairs still have to be done before closing.
Do lenders limit seller credits?
Yes. Limits depend on the loan type and down payment. The buyer's lender confirms the cap.
Keep reading
Want to know what a buyer's inspector may find before they do?
Book a free pre listing condition walk. I walk the house with you, point out what inspectors and FHA, VA, and USDA appraisers tend to flag, and give you planning ranges so you can decide what to fix, credit, price in, or disclose.
Book a condition walkOr call or text (812) 525-5489, or email john@yourpropertynegotiator.com.
The condition walk is a REALTOR® and contractor evaluation, not a home inspection, and it does not replace one. If you have already signed a listing agreement with another agent, please take these questions to your agent.
Written by John Long, REALTOR®, 1 Percent Lists Indiana Real Estate. Working contractor who has priced hundreds of home inspection repair requests. Former labor relations negotiator for a major manufacturer and U.S. Coast Guard veteran.
John Long, REALTOR® · 1 Percent Lists Indiana Real Estate · (812) 525-5489 · yourpropertynegotiator.com
This page is general information, not a substitute for a professional home inspection, and not legal, tax, insurance, or lending advice. Ask a real estate attorney about contracts and disclosure, a CPA about taxes, your lender about loan rules, and a licensed inspector or tradesperson about your house. Nothing here guarantees a sale price, net proceeds, repair cost, payment, timeline, appraisal, inspection result, or loan approval. Cost figures are planning estimates, not bids. I own Wardmark Property Operations LLC, a contracting company. You are always free to use any contractor you choose.