+Real Estate Agents And Home Warranties - Warranties on your home are under scrutinizing because most of the time they are offered by real estate agents. The question is does this recommendation violate a very important law regarding real estate agents and their role in a transaction of a home.
The law in question is called the Real Estate Settlement Procedure Act or RESPA. The law bans anyone connected to a mortgage transaction to receive a referral fee for “settlement services.” Basically, no one involved in a real estate transaction can receive a referral fee for something connect to the sale or refinance of a real estate transaction.
+Real Estate Agents And Home Warranties
+Real Estate Agents And Home Warranties
It is widely known and accepted that real estate agents receive a commission for referring home warranties to home buyers. The home warranties guarantee the work done on the property for a year or the designated period. The cost is about $500 a year and is suppose to protect the new homeowner if something breaks down in the process.
The selling real estate agent typically receives a kickback for this referral, which is one of the reasons most real estate agents love this particular service. It is a great add on commission for them and they don’t have to do very much, but make a suggestion. Most people purchasing a home for $100,o00 or more are not thinking much about an additional $500 payment.
Eventually, the argument and confusion over the real estate agents was dropped without them admitting guilt to violating RESPA, but there are still many that have their doubts.
Speaking of doubts, there are many that feel home warranties are not not worth the money anyway since it is highly unlikely the homeowner will ever need to use it. The parts on the property typically do not break down within a year of purchasing a home. Secondly, the work or service provided by the home warranty service is typically less than stellar to say the least. And thirdly, it is just not worth the money…..period.
Have you ever purchased a home warranty? And a better questions is have you ever used one? As mentioned, most people never call in the use of a home warranty and end up just throwing their money out of the window.
We often talk about being frugal, saving your funds, and making the most of your money, I am not sure purchasing a home warranty from a real estate agent is the best and most effective use of your funds. - +Real Estate Agents And Home Warranties
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