Many home purchasers erroneously assume that the Seller is always somehow liable when there is a defect or failure found in the home’s cooling, heating, plumbing, electrical and/or appliances after the Buyer moves in. Unless otherwise provided for in the contract however, risk of loss often falls on the Buyer. Even where the contract provides that heating, plumbing, pool & equipment, electrical, etc. be “operative” on or until date of possession, disputes can always arise as to when the breakdown occurred, who is responsible, how the repairs are to be funded, and when they are to be made.
Home warranty plans go a long way to alleviate these risks and concerns. For a modest price (currently basic coverage is $350 to $450, slightly more for optional coverage), Seller can provide to Buyer a one year warranty covering, specified heating, plumbing, electrical, water heater or appliance breakdowns. Coverage under most plans commences at closing (although some can be made to commence during the listing period as well). In all cases, there are important limitations and exclusions (example: appliances/systems must be operative at commencement of coverage).
Presentation of Offers
When an offer is generated on your home I will do the following:
- Present the offer to you personally.
- Have the cooperating Broker share Buyer Qualifications.
- Go over every item in the contract with you so that you thoroughly understand what the buyers are offering and what they are asking for.
- Discuss all offers with you in private, after listening to the other agent.
Give you as much input as I possibly can regarding:
- Current market and finance activity.
- Other sales to date.
- Broker comments.
Checklist for Presentation of Offers
I use this checklist to protect you when offers are presented on your property:
- Terms clear and complete.
- Loan Information: Is the anticipated loan realistic?
- Is there an interest rate – not to exceed %?
- Is the Buyer to go back through existing lender?
- Number of days to qualify for and obtain the new loan.
- Loan contingency to be removed in writing.
IMPORTANT – Additional deposit to be increased upon removal of loan contingency.
Seller to carry first loan:
- Insurance coverage, naming beneficiary as insured on fire policy.
- Financial statement and credit report from the Buyer.
- Down payment sufficient to create secure Loan-to-Value Ratio?
- Interest Rate .
- Term – all due and payable in years.
- Payable $ monthly.
- Acceleration clause – due on sale clause.
- Provision for escrow account for taxes and insurance.
Seller to carry second loan:
- All of above plus:
- Request for notice of default on First Trust Deed.
- Date of Closing.
- Date of occupancy – provision made for rental, if possession not upon date of closing.
- Any variation in payment of normal closing costs for Buyer and seller.
- Personal property included and/or excluded.
- Who pays for them?
- Time limit.
- What repairs, if any, are to be made; by whom and with what dollar limitation, if any?
- Owner’s Disclosure of any deficiency within or affecting the property or structure, which might adversely affect the value, use or enjoyment of the property or structure by Buyer.
- Signatures by all Buyers named in contract.
- Homeowner assessments – paid by Seller or assumed by Buyer.
- Sale of Buyer’s Home.
- Number of days to sell – does it correspond with the closing date – if so change it so that if Buyers don’t sell, Sellers can put the home back on the market.
- Contingency release clause – 72-hour release clause.
- Broker acting as principal – disclosure.
- Multiple Counter offers.
- Understanding by Buyer and Seller of costs to be incurred, payments to be made and estimated net revenue to be realized from this transaction