What to do when you get bogus receipts for repairs at a walk through

By
Real Estate Agent with Century 21 Redwood Realty, Arlington Virginia

When buyers make an offer to purchase a home in Arlington, Virginia, they usually make it contingent on a home inspection.  Within that inspection, the inspector will test all major systems, appliances and check for any deficiencies like leaks, cracks and deferred maintenance.  In our standard home inspection removal form in Northern Virginia, it is common practice to ask that all repairs be made by a licensed contractor for the specified trade with a receipt provided prior to closing.

This is very important, because buyers typically do not bring an inspector out again at walk through to verify repairs.   So the buyers and the buyer's agent rely on the receipts to prove the job was done properly, and that is why the proper type of contractor needs to be used and a professional receipt needs to be provided before closing.  

I handled a closing for a buyer this summer in which the receipts were bogus.  Clearly.  They had been created on a Microsoft Word sheet with no dates of work performed, no signature, no license number, no address.  When I requested from the listing agent a license number for the "contractor" it was never provided.

Most legitimate contractor receipts are on a form that has a signature, a date of service and an actual business address and if a license number is not included, it should be able to be provided.  It usually has handwritten notes.  There are clues if they are real or fake.  And if it looks too generic, ask for the license number.  

The seller had made a big deal about replacing the electrical panel, but did not even have a real electrician do the work.  

So what do you do at the final walk through with no or bogus receipts and you are unsure how to check repairs (like an electrical panel being properly installed!).  

You insist the seller put money, and I mean a significant amount, away in escrow so that the repairs can be verified by legitimate, licensed contractors post closing.  That's how I handled my sale this summer, and sure enough, the electrical panel and the plumbing had major issues.  If we had of taken the receipts at face value, the buyer would have been on the hook for the seller's shoddy repairs.

I work with just as many sellers as I do buyers, and as the seller's agent, I make sure they get the work done by the proper professionals with the right kind of documentation.   Contracts are binding, and if the signed agreement says to use a licensed contractor and provide receipts, it needs to be done.    It will save both the buyer and the seller money and trouble in the end.  

If you are looking for a real estate agent to best represent your interests in Arlington, Virginia, contact me to talk about how I can be of service to you.


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Rainmaker
256,173
Coral Gundlach
Century 21 Redwood Realty, Arlington Virginia

Hi Chris Ann.  When I asked for the license number, the silence was was my first red flag.    And I believe in following the contract.    Thanks for commenting!

September 29, 2011 04:23 PM
Rainmaker
1,166,414
Jay Markanich
Home Inspector - servicing all Northern Virginia
Jay Markanich Real Estate Inspections, LLC

Yikes!  I don't often do re-inspections, as the agents trust the receipts of those "professionals" providing their services.  But it seems to me that every time I do one, there are issues not resolved or still wrong.

Once the HVAC company doing the "repairs" had a license, but it expired four years earlier!

September 30, 2011 07:20 AM
Rainmaker
693,359
Debra Walsh
Hudson Valley NY Real Estate 845.928.8000
Keller Williams Realty

Good advice Coral!  Too many times people try to get away with not making the proper repairs or using the right people. 

September 30, 2011 09:10 AM
Rainmaker
256,173
Coral Gundlach
Century 21 Redwood Realty, Arlington Virginia

Jay, we should be able to rely on the receipts.  Not one to be paranoid, but there are signs someone is not being honest.  

Debra - It is happening too often these days.

September 30, 2011 01:18 PM
Rainmaker
470,601
Susan Haughton, REALTOR Alexandria VA Homes for Sale

Good for you and your buyers, who are no doubt singing your praises. And what a shame about the bogus receipts...sigh...isn't it challenging enough without the unethical behavior? 

September 30, 2011 05:22 PM
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Coral Gundlach

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Additional Information

Looking to buy or sell real estate in Arlington, Virginia and surrounding areas? This blog is a great place to get advice, tips and market information on Arlington, Alexandria, Annandale, Falls Church, McLean, Fairfax, Vienna, Oakton, Chantilly, Reston, Herndon, Springfield and Loudoun County Virginia Real Estate. I am a Top Producing Realtor servicing both buyers and sellers in all of these areas. If you are looking for a different kind real estate experience, then give me a call or email. Buyers: My goal is to give my clients the tools and information they need to find their best home. I will give you honest, sound advice, based in reality of the market, and never pressure you. I also will guide you through the complicated process of contracts, mortgages, inspections and negotiations. Sellers: I do extensive comparable research, and will know the best features of our home to market, blanketing the internet and surrounding area with news of your listing. I will blog about your listing, tell my colleagues about it, and make sure its best features reach the appropriate target audience.
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