KeptGuides
Repairs vs. credit vs. price reduction: which to pick
Choose based on the dollar figure and how much you trust the seller's contractor, not which sounds thorough. A credit frees more cash than a price cut.
Updated · By 
Ben Sikes
Should you ask for repairs, a credit, or a price reduction?
Pick repairs, a credit, or a price reduction based on the dollar figure on the finding and whether you trust the seller's contractor to do the work right, not on which option sounds more thorough. A finding like a corroded water heater you don't want the seller's cheapest contractor touching is worth more to you as a credit or a price cut than as a completed repair. A finding with no firm number yet, one that needs a specialist quote, is a poor fit for a fixed credit until someone has scoped it. The table below sorts situations buyers run into. If you haven't sorted your findings into what belongs on the list yet, start with what to ask for after a home inspection.
Which fits your situation?
Start from your priced list of findings, then match each line item's situation to a starting ask. One finding can land in more than one row; a big-ticket item you don't trust the seller's contractor with is both rows at once.
| Your situation | Repairs | Credit | Price reduction |
|---|---|---|---|
| Tight on cash at closing | Weak fit: frees up no cash, and ties your closing date to the seller's contractor's schedule | Best fit: the amount comes off what you owe at the closing table, up to your lender's limit | Partial fit: only the down-payment share of the cut shows up as less cash to close |
| Don't trust the seller's contractor | Weak fit: the seller picks who does the work and what materials go in | Good fit: you hire and pay your own contractor after closing | Good fit for the same reason: you control who does the work |
| Finding needs a specialist quote | Workable once a specialist writes the scope into the repair request | Poor fit until it's scoped: a fixed number set before a quote is a guess | Workable once a range exists; same caveat as a credit |
| Lender-required repair | Fits if your loan officer confirms this finding must be done before closing | May not satisfy the lender on its own; ask your loan officer | Doesn't resolve it either; ask your loan officer |
| Small items | Weak fit: not worth a repair request over a handful of low-dollar items | Workable if bundled into one modest credit instead of a checklist | Weak fit: rarely worth reopening the price for a few small items |
| Big-ticket item | Workable if the request names the brand, method and standard you expect | Workable once you have two or three quotes; watch your lender's credit cap | Workable, especially if the finding also affects the appraised value |
How does a credit change your cash to closing, compared to a price reduction?
A credit and a price reduction can be the same dollar amount and still leave you in different positions on closing day. A credit is money the seller applies at the closing table, up to what your lender allows, so it lowers the cash you have to bring close to dollar for dollar. A price reduction lowers the purchase price itself: if you're financing, your loan amount drops by the full reduction, but the cash you bring at closing only drops by your down payment's share of it, since the rest of the benefit shows up as a smaller loan and a smaller monthly payment, not less cash now. A reduction that brings the price below the appraised value can also lower your loan-to-value ratio; a credit does not, since it isn't a change to the price.
Applied to a real priced list, the difference looks like this:
| Example | Amount | Source |
|---|---|---|
| Public sample memo, total of all priced findings | $13,760 | https://usekept.com/ |
Asked for as a credit, that $13,760 comes off what the buyer owes at the table, subject to the lender's cap. Asked for as a price reduction, the same $13,760 lowers the purchase price and the loan amount, but only the slice tied to the down payment percentage shows up as less cash on closing day; the rest lowers the monthly payment instead.
How does the dollar figure on a finding decide which one to ask for?
Every ask on this page starts from a priced list, not a checklist of problems. A small, firmly priced finding is a credit-or-nothing conversation. A large, firmly priced finding can go any of the three ways in the table above. A finding with no firm number yet changes the math: Kept Inspect's memo marks some findings as needing a professional quote instead of a formula price, among them foundation structural movement, whole-house repipe, regrading and drainage correction, and similar. Ask for a credit on one of these before a specialist has scoped it, and either the seller is guessing a number or you are: too low, and it doesn't cover the work; too high, and the seller has a real objection. Get the specialist's estimate first, then choose repairs, a credit, or a price reduction with that number in hand. If the finding is large and still unpriceable as your deadline nears, see when to walk away after a home inspection.
What if the repair is a lender condition, not a negotiating choice?
Some loan programs require certain repairs to be completed before closing. Your loan officer tells you whether a finding on your report is one of them, and if it is, a credit alone may not satisfy the lender. Treat that finding as a question for your loan officer first, not a number you pick from the table above.
Where do credit mechanics show up at closing?
Once you and the seller agree on a credit, it still has to fit inside what your lender allows and land in a specific line on your closing disclosure, not arrive as cash back to you. See how a repair credit works at closing for the lender caps and where the number shows up on your statement.
If your inspection window is closing and you need a priced list before you pick one of these three, get a repair-cost memo from Kept Inspect, usually under 4 hours, at usekept.com.
Sources
Cost figures are modeled from public wage and materials data unless a line says observed. Kept is accountable for the numbers on this page, and corrections go to support@usekept.com. How we price.