Home Warranties?
Hey, folks. Another 'first-time 'm doing this' question.
I've been talking to a seller about a fourplex he wants to get rid of. I had originally wanted a home warranty, and basically, he wants to make about $15,000 worth of repairs (termite work, etc - he's a general contractor) to the property and save the cost of the warranty (I suppose he's thinking more cash for him, given that he'll be paid, although a discounted rate, for his contracting work).
And yet, I still think a warranty might be a good idea. Would love to have a backup, in case the roof goes out tomorrow, or one of the four refridgerators or two washer/dryers in the bulding decides to sputter and die.
Any thoughts? Anyone have experience getting a home warranty for a fourplex, as opposed to a SFR (I know it must be more money, but can't seem to find a quick quote online)?
Or does anyone actually use the things at all?
Thanks!
Don't know about "home warranties" on fourplexes but some thoughts...
First of all, if the seller will be making the repairs required for a "clean" termite cert, there usually is a reinspection by the termite folks. You didn't indicate what other types of repairs were involved. The seller can transfer to you all warranties that he has on appliances, roof, etc.
Also, the municipality may require a U&O to be issued on conveyances of resale properties and perhaps specifically fourplexes. Check with municipality. If there's a U&O requirement, find out what their inspection consists of.
Home warranty programs are somewhat like "the Lord giveth and the Lord taketh away." Before you push for a home warranty, read the fine print as to what would be covered and what would be excluded.
I would also make sure to get a copy of the seller's disclosure statement about the property and any/all work done to it.
Home warranties are an excellent way to hedge your investment, and they're cheap. Not sure about 4plex, but a sfr in MI runs $325-$375 for 1 yr. Also, NOTE: Any party to your transaction may purchase the home warranty. If you really want the place, and he really doesn't want to pay for the warranty, may be best to bite the bullet and buy it yourself.
G/L