In real estate heaven, home buyers are always satisfied, sellers are gratified, everybody`s happy and nobody ever gets sued.
Most real estate agents would acknowledge that this is not always the case.
Nevertheless, these days the real estate community seems to be searching for the risk-free home sale.
For example, the National Association of Realtors is conducting a nationwide campaign for a seller-disclosure form. The form, mandatory in Maine and California, is a checklist that the seller must complete attesting to the soundness, or the lack thereof, of the property in question.
Home inspections, generally commissioned by the buyer, have become standard practice in many areas, with sale agreements contingent on the home`s passing the inspection.
Yet another strategy is the home warranty.
Home warranties are fairly standard fare for new homes. But according to the National Home Warranty Association, warranties for existing homes have gained popularity. The number of such warranties sold nationally increased from 282,226 in 1986 to about 535,000 in 1990, according to the association.
One-year pacts
In essence, warranties are one-year service contracts that typically cover interior plumbing and heating systems, garbage disposals, central air conditioning and built-in appliances.
While they can be a selling tool in a dismal market and might provide peace of mind to the buyer, the coverage is hardly all-inclusive.
Exclusions include such major items as roofing and structure. ”We can`t bring a whole house up to code,” said association president John Kinker.
What`s more, a warranty adds another cost- $350 or more -to already costly home transactions. Prices vary, depending on the company and the level of coverage.
Several national companies, including American Home Shield of Santa Rosa, Calif., and Homeowners Marketing Services Inc. of Hollywood, Fla., offer them through brokers, which get a fee for each warranty sale. ERA Inc., the acknowledged home-warranty pioneer, offers its own program.
Home warranties can be purchased by buyers, sellers or brokers.
Association spokesman Michael Rosenfeld said that nationwide, warranties covered slightly more than 16 percent of existing homes sold in 1990. They are immensely popular in California, which accounted for about 50 percent of all such warranties, he said.
Support mixed
There are those who stop short of endorsing the warranty concept.
Thomas R. Schickling, of Robert J. Nash Inc., a Philadelphia real estate firm, described the home warranty as ”a sales gimmick.”
”Most of them are superficial,” said Jules Falcone, spokesman for the American Society of Home Inspectors.
