Imagine you’re selling your home.
The buyer completes their inspection, reviews the report, and asks for several repairs. One of the requests states that the work must be completed by a “licensed contractor.”
Seems straightforward enough.
After all, most people would agree that repairs identified during a home inspection should be completed by someone who knows what they’re doing. The phrase sounds reassuring. It suggests professionalism, competence, and accountability. Yet the more I thought about it, the more I realized that what appears to be a simple request may not be nearly as simple as it sounds.
For readers unfamiliar with the process, buyers often have the opportunity to conduct inspections after a property goes under contract. Following those inspections, they may ask the seller to make repairs, provide a credit, obtain additional evaluations, or take some combination of those actions. These requests frequently become the subject of negotiation between the parties.
Recently, while reviewing one of these requests, I found myself focusing on the phrase “licensed contractor.” Not because I disagreed with the intent behind it, but because I began wondering how a seller is actually supposed to determine when they have complied.
Missouri does not issue a statewide general contractor license. That fact surprises many homeowners and, occasionally, some real estate professionals. While certain trades and professions may be licensed through state agencies or local municipalities, there is no single Missouri general contractor license hanging on the wall that settles the issue once and for all.
That raises some interesting questions.
Suppose the seller spent thirty-five years building homes and has repaired, remodeled, or replaced nearly every component of a house at one point or another. He is confident he can properly complete the repair himself. Has the buyer’s concern been addressed?
Now consider a different scenario. The seller hires a reputable contractor who has been performing similar work for decades, carries insurance, has an excellent reputation, and provides documentation showing the repair was completed. Most people would likely view that as a satisfactory outcome. But what if that contractor does not hold a municipal license in the jurisdiction where the property is located? Has the seller complied with the request?
The answers may depend on what problem the buyer is actually trying to solve.
Some buyers want assurance that the repair was completed correctly. Others want an independent third party involved. Some want documentation showing the work was performed, while others are primarily seeking peace of mind. All of those objectives are reasonable, but they are not necessarily the same objective.
That is where the phrase “licensed contractor” begins to get interesting.
The more I considered the issue, the more I realized that buyers, sellers, and agents may all be using the same words while envisioning very different outcomes. One person may be thinking about competence. Another may be thinking about independence. A third may simply want a receipt from a professional business. Everyone believes they are talking about the same thing, but they may not actually be defining the phrase in the same way.
This is hardly unique to inspection negotiations. Real estate is full of terms that sound precise until you start asking questions. We often assume everyone shares the same understanding because the language is familiar. In reality, familiar language can sometimes hide very different expectations.
To be clear, I am not suggesting that buyers should stop caring who performs repairs, nor am I suggesting that sellers should be free to handle every repair themselves. My point is much simpler. When we use a phrase like “repair by a licensed contractor,” we may want to spend a little more time discussing what we actually mean.
Are we looking for experience?
Independence?
Documentation?
Accountability?
Peace of mind?
The answer may be different from one transaction to the next.
As REALTORS®, much of our job involves helping people move from assumptions to understanding. Sometimes that means asking follow-up questions when everyone else assumes the answer is obvious.
The next time you see the phrase “repair by a licensed contractor,” consider asking one simple question:
Licensed by whom?
You may discover that
Karen Moeller
STLKaren.com
Karen.McNeill@STLRE.com
314.678.7866
About the Author:
Karen Moeller is a St. Louis area REALTOR® with MORE, REALTORS® and a regular contributor to St. Louis Real Estate News, helping clients make informed, data-driven decisions.
