How Repair Credits Work in Washington (2025 Buyer & Seller Guide)
If there’s one part of Washington real estate that consistently confuses both buyers and sellers, it’s repair credits. Whether I’m working with first-time buyers, military families PCS’ing to JBLM, move-up sellers in Pierce County, or downsizing clients in Puyallup or Gig Harbor…the same questions always come up:
“Why can’t the seller just give us cash?”
“What counts as a repair credit?”
“Can the lender deny it?”
“Is a credit better than asking for repairs?”
“What’s normal in this market?”
Repair credits are one of the most powerful tools in a Washington real estate transaction — if you know how to use them. They help buyers cover repairs without forcing the seller to coordinate contractors, and they help sellers avoid delays, re-inspections, or complicated project work.
This guide breaks down exactly how repair credits work in WA so you feel confident negotiating and protecting your investment.
If you’re new to how inspections work in WA, start here:
What to Expect at Your First WA Home Inspection
1. What a Repair Credit Actually Is (WA Version)
A repair credit is money the seller gives the buyer at closing to help with repairs, updates, or closing costs.
In Washington, this is typically handled as:
A seller credit
Applied toward buyer’s closing costs
Often used in place of the seller doing physical repairs
It is NOT:
Cash handed directly to the buyer
Refundable outside escrow
Payment for a specific contractor
Money given before closing
Credits must run through escrow and be approved by the lender.
2. Why Repair Credits Are So Common in WA
Sellers often prefer credits because:
They don’t have to hire contractors
They don’t risk delays
They avoid re-inspection issues
They avoid disagreements about workmanship
They keep control over timing
Buyers often prefer credits because:
They can choose their own contractors
They can control quality
They can schedule repairs after closing
They get flexibility
Credits make both sides feel safer — especially in tight timelines.
If you want to understand which inspection items matter most before asking for credits, this guide helps:
WA Inspection Red Flags Buyers Should Never Ignore
3. How Repair Credits Are Negotiated in Washington
Repair credits come up after the inspection.
The timeline usually looks like this:
Buyer conducts home inspection
Inspector finds issues
Buyer and agent review report
Buyer decides what to request (repairs or credits)
Seller reviews the request
Both parties negotiate
Credit is agreed upon and documented in Form 35R
Credits must be written into:
Form 35R (Inspection Addendum Response)
The Purchase and Sale Agreement via an addendum if needed
You cannot verbally agree. Lenders require written documentation.
4. Lender Rules: What Buyers Need to Know
Not all credits are allowed by lenders.
General lender rules in WA:
✔ Credits must go toward buyer closing costs only
✔ Credits cannot exceed actual closing costs
✔ Credits cannot go to the buyer as cash
✔ Credits must be written into the contract
✔ Credits must be disclosed early enough for underwriters
Maximum allowable credit:
Most loans allow up to 3%–6% of the purchase price in combined seller credits.
For military buyers, this matters:
VA Benefits in Washington: What Military Families Should Know Before Buying Near JBLM
5. Common Repair Credit Amounts in WA
The most common credit amounts I see in Washington are:
$1,500 (minor items)
$2,500–$5,000 (moderate repairs)
$7,500–$10,000 (roof, sewer, crawlspace concerns)
$10,000+ (major issues or older homes)
Credits often align with repair estimates — but not always. Sometimes buyers accept a smaller credit simply to move forward without losing the home.
6. Repairs vs. Credits — Which Is Better?
Sellers usually prefer: Credits
No scheduling
No risk of delays
No re-inspection drama
No contractor issues
Buyers often prefer: Credits too
They choose contractors
No “quick fixes”
Work can be done right the first time
Flexibility in timing
The only time repairs may be better is when:
A safety hazard needs addressing
The lender requires the repair
The buyer doesn’t have funds after closing
Otherwise, credits keep the transaction cleaner and smoother.
7. Which Repairs Commonly Turn Into Credits in Washington
Certain issues show up frequently in WA homes — especially older homes or homes near large trees, high rainfall areas, or crawlspaces.
Common items converted to credits:
Crawlspace insulation repair
Vapor barrier installation
Minor electrical corrections
Gutter repair or cleaning
Roof treatment for moss
Water heater near end of life
Furnace service or replacement
Minor plumbing leaks
Dry rot repair
Deck repair
Small sewer line concerns
If sewer issues show up, read this first:
WA Sewer Scope Guide: What Buyers Should Expect
8. When Physical Repairs Are Better Than Credits
Sometimes credits are not the best choice.
You may want actual repairs when:
The issue is structural
The lender requires it (FHA/VA)
There’s a health or safety risk
The repair would exceed allowable credit limits
The buyer doesn't want the responsibility
Examples:
Active roof leak
Broken furnace
Failed septic system
Dangerous electrical panel
Major plumbing failure
For septic-specific rules, see:
WA Septic System Rules Buyers Need to Know (2025–2026)
9. How Sellers Should Think About Credits
For sellers, credits can:
Save time
Avoid messy repairs
Keep the buyer engaged
Prevent renegotiation later
Reduce stress
A well-timed credit often helps sellers keep more money long-term by preventing deals from falling apart.
If you’re listing soon, this blog helps with strategy:
What NOT to Fix Before Listing in Washington
10. How Buyers Should Think About Credits
For buyers, credits offer:
Flexibility
Quality control
Control over budget
The ability to prioritize repairs
Long-term peace of mind
Credits are especially helpful for first-time buyers who need the funds to make immediate improvements after moving in.
11. How Much Credit Is “Normal” in Washington?
There is no universal rule, but common guidelines:
Minor issues → $1,000–$2,500
Moderate issues → $2,500–$5,000
Major issues → $5,000–$10,000
Large system issues → $10,000+
Credits depend on:
Home age
Repair severity
Market competitiveness
Buyer strength
Seller motivation
12. Final Thoughts: Repair Credits Keep WA Transactions Moving
When used well, repair credits:
Keep deals alive
Reduce stress
Protect timelines
Help both sides move forward
Make inspections less overwhelming
The goal isn’t to “win” the negotiation — it’s to create a solution that protects both buyer and seller and keeps the transaction moving toward closing.
If you’re navigating an inspection or trying to negotiate repair credits in Washington, I’d be happy to walk you through what’s normal, what’s risky, and what puts you in the strongest position. You don’t have to figure this out alone — I’m here to help.
Written by: Lani Fisher — Washington Realtor Helping Everyday Buyers & Sellers With Confidence