This is the third home I’ve sold, so I’m not new at this, but today we received an offer with the following stipulation(s):
The question is, for all you real estate professionals and others: why would he do such a thing? What’s his motivation?
Thanks.
Maybe when he looked at the house he saw some problem that would be covered under the home warranty and a home inspection might make everyone aware of it so that it wouldn’t be covered by a home warranty.
Sounds like a good deal for both of you, you never know what a home inspector might find.
Don’t know, but I’d just at that offer. You never know what the home inspection might turn up, and unless your house is brand-new, almost any repair you can’t do yourself is likely to exceed $355.
Not a real estate pro, this is just a WAG. Is he working with a buyer’s agent? Maybe that agent is promoting these warranties.
No, Harriet, I don’t think so. He’s my next door neighbors best friend who was just released from the Army (medical discharge: he was diagnosed with MS), and his last station was in Texas (Killeen, I think). He wants to move to Knoxville where friends and family live, and our one-story is just right for somebody in his situation. He has a rather nice pension (15-years service and disability) and is looking to move in soon.
I’m not sure what a “Home Warranty” implies, but a couple of questions come to mind
would it be transferable from the Seller to the Buyer
would it cover any pre-existing condition, I have to assume that any “Home Warranty” vendor would make its own inspection and reveal any existing flaws or defects.
It seems odd to me to set it up like that. I think if I were in your shoes I would counter-offer with your agreement to purchase the warranty but if he backs out he has to reimburse you for the warranty. Wait, better yet, counter-offer with the stipulation that buyer will purchase warranty and seller will reimburse buyer $355 upon closing the deal OR agree to purchase the warranty for $355 after the deal is closed.
This would protect you from getting screwed out of $355 if they back out.
Also, you might want to give him a call and see what the deal is.
I always get a home warranty when I buy a house- they are pretty standard here, and cover most things but not all. I don’t see an issue with the buyer waiving the inspection, except for ignorance or stupidity… :eek:
Yeah, that’s the thing, EJsGirl: for $355 I get to waive the home inspection, free and clear? It sounds too good to be true.
Joey: it’s currently structured so that the warranty will be bought at closing. I’m assuming there has to be an approval process prior, however.
Wow, I would never waive the inspection as a buyer! As a seller, I don’t see the downside here for you. We are getting our house ready to sell and any buyer that wants to make me that offer is welcome 
Real Estate professional here: If there is something major with the house and it isn’t covered by the warranty, the buyer can come after you.
It sounds to me like the buyer wants you as seller to pay for the warranty, rather than them as buyer to pay for the inspection.
I’d make damn sure I get some signed, notarized, legal documentation that the buyer did not want the inspection and waives all rights to come after the seller if something happens after the closing.
I also wonder at the buyer’s understanding of how home warranties work. The warranty company could try to argue that nearly everything that crops up is a pre-existing condition. I read a lot of horror stories out there about warranty companies trying to weasel out of stuff.
Obviously you’re still obligated to disclose known flaws, even with a warranty in place. If you conceal a known flaw, the buyer could certainly come after you even with the waived inspection.
IIRC, on my last two home purchases (okay, my only two!), the seller paid for the home warranty for the first year, but I don’t remember who paid for the inspection. It would be worth it to me as the seller to do it, so that everything potentially wrong with the house is disclosed to the buyer prior to closing. Unless the buyer is purchasing a house “as is,” I cannot see a good reason to waive the inspection.
I would get it anyway, pay for it, and then pay the $355 for the warranty.
This may vary by state but usually the buyer pays for the inspection.
A seller might have one done before listing the place, to make sure they know of any flaws; no idea how common this is however.
As far as waiving the inspection, the buyer in this situation is being a bit foolish in doing so. It’s sometimes done when there’s a seller’s market - a seller might use that as the deciding factor when there are multiple offers on the table.
The situation described in the OP, though, I really think the buyer is being foolish and getting some bad advice. A warranty isn’t a bad thing, but it shouldn’t substitute for the inspection.
We got a home warranty paid for by the seller when we bought our current house, but we did not waive inspection. Only time I’ve waived inspection was on a condo.
A typical home warranty would not be a substitute, because it doesn’t cover everything in the house. Usually, a home warranty covers the appliances, plumbing, and maybe the HVAC. Wiring problems, wood rot, non-compliance with code, basement leaks, etc. would not be covered.
FWIW, our seller gave us a home warranty but the warranty company (Old Republic or somesuch) wouldn’t issue one without an inspection.
That’s what I was thinking. For the seller to get the warranty, the seller will have to pony up for an inspection.