Monday, March 14, 2011

Seller's Coverage

Most home warranty companies provide FREE "Seller's Coverage" for the homeowner while the property is being marketed for sale.  Although the "free" coverage is not as extensive as the coverage provided to the buyer after close of escrow, it still gives significant coverage on many items, and can also be upgraded to cover additional items for a relatively low cost.  If the homeowner uses the coverage, they are going to pay a low co-pay to the vendor at the time of service (typically $55-75) for the covered repair.  It is important to read over the list of coverages and limits so that you understand what is and is not being covered.  One of the benefits to having the Seller's Coverage on your property during the marketing of the property is that it may reduce the chance of a claim being rejected as a "pre-existing" condition," as the original date the coverage was placed on the property is the effective date of coverage, even though the Buyer's Coverage is typically for one year starting on the date of close of escrow.  When you consider the longer marketing times we are experiencing, it's clear that having the earlier date of coverage is a benefit to both Seller and Buyer.  Even if you are not selling your property, having a home warranty can often defray the cost of unexpected repairs.  If you are purchasing a property, it may be wise to inquire as to whether there is any existing coverage on the property that may be of benefit to you.

Short Sales

Over 70% of the properties in Clark County are now "upside-down", meaning that the mortgage debt on the property exceeds the current market value.  So, property owners who are in this position may consider applying to their mortgage company (or companies, if they have more than one mortgage) for a "short sale."  The term "short sale" simply means that the property is sold for the current market value, even though the amount owed on the property exceeds that figure.  In order  for this to happen, the mortgage company must agree to release the lien on the property at close of escrow so that clear title can be conveyed to the new owner.  Approximately 90% of all short sales are now being approved (and conversely, approximately 90% of all loan modifications are being denied).  If you are curious about the short sale process, feel free to contact me for more information.  We will be hosting a Short Sale Seminar on April 28, 2011, at our office from 5:00 - 6:30pm.