Topic: Home Owner Warranty - The Home Warranty Clause and how it works in a Real Estate Sales …

Some years ago, our Texas Association of Realtors Sales Contract for Homes was changed to include a fill-in-the-blank spot where the Seller can contribute a certain amount of money toward the Buyer's purchase of a Residential Service Contract (commonly called a Home Warranty), such as those offered by American Home Shield. If Buyer purchases a residential service contract, Seller shall reimburse Buyer at closing for the cost of the residential service contract in an amount not exceeding $__________ . In the case of our investor buyers, we use to work the deal out so that the buyer asked for the Home Warranty amount up front, but on the final Amendment, along with repair amounts, we moved the dollar amount from the home warranty to paragraph 12(A)1B, where the Seller pays for some of Buyer's closing costs. So, when the Seller contributes 100% of the cost of the Home Warranty to the Buyer at closing, the Seller is obtaining a benefit also. If the Seller allows a buyer to move the $350 dollar amount from the Home Warranty clause to the Buyer's closing costs (paid by Seller) paragraph 12(A)1b, the Seller's bottom line doesn't change, but now he's given away $350 and is receiving nothing in return whatsoever. read more

Technorati Tags: warranty, home, seller, buyer, contract, service, home owner warranty