It seems to me that a lot of people have been coming from out of nowhere to "help" financially distressed homeowners.  I've done loans in the past, and I haven't been able to see any miracles out there for the distressed.  The majority of these owners have negative equity in the property.  I have advised these to first talk to their lender and a lawyer to seek a possible modification for which the lender will qualify you based on hardship.  If that does not work, a short-sale may be possible, but check with your tax consultant and a lawyer for any financial and/or legal consequences.  But recently, owners have been approached by third parties to do the financial packet on the owners "behalf" for a fee.  Could this be a scam?  Ex. a lender that had sold the loan to another company approached my client.  For a fee from a lawyer that they would forward your file to, that lawyer would negotiate a loan modification with your new loan company......pretty confusing, huh?  Has anyone else heard of this?

I just learned something very interesting today.  It's a small detail, but it can make a huge difference in the outcome of your open escrow!  I never knew how home warrenty coverage worked for a transaction in escrow until now.  Although not all companies are the same and state laws differ, here's some food for thought when you discuss more with any home warrenty representative.

Some companies offer seller's coverage in addition to the traditional buyer's coverage that can cover certain specific details during the escrow period to increase chances of an income producing close.  Some have this as a per day deal that only comes out of pocket at close of escrow.  Let's say your seller calls you 2 weeks before the close and says the AC has stopped working.  If it is a covered item, there will be no expense to your seller and it can be repaired in time to close.  If they do not have coverage, and it is a costly repair, you'd better hope that they have a cash reserve or you may be heading into some turbulence.

All sounds good, right?  Well there is another aspect to consider......if there is pre-existing disclosure!  Say you already had (or the buyer) has already had a home inspection.  Any problem identified on that inspection has now been disclosed and probably won't be covered under the home warranty if you have not had one put in place.  Make sure that your coverage is already in effect once escrow is opened and that the home inspection takes place after that coverage is in place!  If you put it in place, out of habit, everytime you open escrow you'll never have to worry about an inspection sneaking in when you are off guard!  Your sellers will thank you too!

Of course, not everything is covered.  You have to shop for the best coverage for the dollar.  Check for coverage and limitations on pre-existing conditions.  If there is coverage on pre-existing conditions, make sure you have the representative clarify what THEY mean by pre-existing.  Many companies are expanding their coverage in California and have become quite competitive.  Every state has different laws, so check with your state.  If offering home warranty coverage is available for you, talk to different company representatives.  A good representative can give you all the ends and outs to get the most advantage for your clients from utilizing their warranty services.  It's a great marketing tool for potential clients too!  And the investment is minimal.  Hope this helps!