Should a Potential Buyer Give Money to a Seller to Make Repairs?

People considering a home purchase often feel the pressure of many emotions. They want to get out of their current living situation and into a presumably better home. Having a place to call their own, and make their own choices, is very enticing for many people. So what should a buyer do if the seller asks for money to make repairs?

Typical Scenario

Here is a common situation. A young couple wants to buy their first home and they are considering a FHA mortgage. They find a home that they like, in their price range, but the home needs a few updates. Perhaps the interior paint does not suit their taste, or the carpet is outdated, or the couple would prefer energy saving windows. Whatever the case, the buyers approach the sellers and ask about these improvements. The seller says “sure, I can do these improvements, if you pay me the cash for it.”

What should the buyer do?

Short answer; don’t give the seller cash.

Long Answer

If the potential buyer simply gives the seller the cash for the improvements or repairs, there is no binding legal agreement forcing the seller to carry out his promise. There is nothing stopping the seller from pocketing the cash and selling the home to a different buyer.

It is a much better idea to talk to the real estate agent and ask for an amendment to the contract. The contract can be changed to reflect the improvements. In addition, it is possible to change the selling price of the home so the seller gets compensated for the improvements. This will be dependent on the appraisal amount.

The bottom line is that it is usually a bad idea for a home buyer to give money to a seller before the sale of the home. It is much better to get everything in writing with a binding contract that holds both parties accountable for their actions.

The good news is that FHA will allow the seller to make improvements to the property. In some cases, the appraiser may actually suggest that certain fixes be made. However, these are usually deficiencies in the home, such as a leaky roof or problems with the electricity, and not necessarily a matter of taste, such as unsightly carpet or odd colored wallpaper.

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Filed under: FHA Loans, Illinois Blog

Luke Skar

Luke Skar is the web developer and content strategist for Inlanta Mortgage in Madison, serving Wisconsin, Illinois, Minnesota and Florida. Guided by his 12-plus years of various mortgage marketing experience, Luke provides top-quality SEO services, effective social media management, and web development and maintenance. Luke’s career in the mortgage industry began back in 2001, as a loan processor. After becoming a loan officer for a number of years, Luke is now the sole owner/operator of To ensure that all the information he posts is fresh, accurate, and up-to-date, Luke relies on the knowledge which his years of dedication to keeping up with the constant change that the mortgage industry provides.


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