It’s not uncommon to run into misunderstandings with home warranties in a real estate contract. Oftentimes, it revolves around the question, “Who’s going to buy it?” In other words, which party will actually select and order the warranty? Luckily, there’s a quick, simple way to smooth out any home warranty issues.
If you have any questions about this process, first ask your broker or real estate attorney. However, for the sake of example, I will use section 35 under the Virginia standard contract for context. First, we select “yes” and proceed to check off “seller” to pay and provide the warranty. We commonly cap this number at $500 and use the clause, “buyer to select warranty plan,” as a standard. If the buyer doesn’t know what type of warranty plan they want just yet, this is a good framework to use. It gives the buyer an opportunity to select the best plan that works for them later on. It sets an expectation for the seller to pay for it and caps their expense. This typically eliminates misunderstandings and creates a win-win with the least amount of back-and-forth banter.
If you have any questions about this topic or anything else real estate related, I’d be happy to help! Give me a call or send me an email today.