What are legal warranties, and should you sell your home without one?
Selling without a legal warranty has become increasingly popular in recent years. However, what do legal warranties even mean, and if you’re a buyer or seller, how does not having one affect your real estate move?
In a nutshell, legal warranties protect the buyer from unknown defects in the property that would have cost the house not to sell at its listed price or caused the buyer not to purchase the house at all. They are prescribed by law, so they don’t need to be stipulated in promissory notes or contracts. However, if you want to exclude a legal warranty, you’ll need to mention it to your buyer.
Sellers don’t need to guarantee against the hidden defects the buyer has found, which is why we strongly recommend that buyers always have the property inspected before closing the deal. On a few occasions, sales without legal warranties can sometimes happen. These can include cases such as repossession by a bank, forced judicial sale, or an estate sale. It’s also advisable to exclude legal warranties when the sellers are elderly who don’t want the hassle of legal issues in the future.
For sellers, selling a property with a legal warranty will likely make your home more attractive to buyers and increase its price. To protect yourself from legal repercussions, you must have a properly completed seller disclosure form. If you’re a buyer, remember to always have the property inspected. Inform your inspector beforehand if you’re buying without a legal warranty, so they’ll look out for your best interests.
If you want to find out whether you should be selling with or without a legal warranty or have any other questions, reach out to me by giving me a call or sending an email. I’m here to help!