Home warranties provide peace of mind
August 12, 2008
Home warranties can provide peace of mind to both buyers and sellers. Home warranties are a service contract that cover items such as furnaces, appliances and hot water tanks. In most cases a home warranty is available to be purchased as part of a real estate transaction. Generally home warranty providers are recomended by your real estate agent or by searching for local providers in your area.
Home warranties are a good tool for a home seller to utilize in an effort to provide an incentive towards a home buyer who may be considering purchasing their home as well as provide comfort that after they sell their home they don’t have to worry about the home buyer contacting them should an inssue arrive with any of the homes appliances. In almos every state a home seller is required to fill out a sellers disclosure and a seller almost always sells their home under the requirements of being sold “as is”. Even with these two conditions in place, sellers can face potential litigation issues when items break with their old homes and home warranties provide a layer of insulation against this risk.
Home buyers can benefit from home warranties as they often have limited budgets to handle unexpected home repairs during the first year of home ownership. A typical home warranty will offer coverage to the home buyer during the first twelve months of home ownership with a modest deductible of only $50 to $100. Home warranty companies will generally require the home owner to work with an approved service provider that they recomend. Home warranties may not be available if you are purchasing a bank owned or foreclosed property and will exclude coverage for any items that were not working when the home was purchased.
Condo associations face tough times
July 12, 2008
The downturn in the real estate industry has been extremely tough for condo associations. Home owners who purchase a property in a community environment where funds are collected on a monthly or quarterly basis have seen their association fees increase sharply.
The main challenge facing condo associations is that they are struggling to recoup their fees when a property is foreclosed. The association fees can be placed as a lien agains the property, however their is often little or no equity in these properties when they are sold and the association is left without any financial compensation. In developments that have planned for capital improvements or renovations, in some cases these projects are being put on hold until the association has the ability to recover financially.
If you are considering purchasing a condo they you would be wise to request for a summary of the condo association delinquency rates, and present operating capital or reserve fund. Asking questions such as how old the development is, what are their future plans for improvement and how is the association managed are critical. In addition, your lender will want to find out how many of the units are owner occupied and whether or not the area is considered a market of depreciating home values.
