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Home warranty is a good investment

Question: We have our home listed for sale. The real estate agent suggests we pay $425 to buy a one-year home warranty for the buyer. But I think this would be a waste of money since we will have sold the house and have no responsibility to the buyer if something goes wrong. What do you advise about home warranty policies? _ Edward H.

Answer: Let's first discuss what is and is not covered by the one-year home warranty policies available from real estate agents. These policies pay for repairs during the year after the home sale to the wiring, plumbing, water heater, built-in appliances and furnace. Excluded are the roof, foundation, plumbing outside the home's perimeter, swimming pool and air conditioning. However, these items can usually be included for an additional premium.

We should be clear about why you would want to buy the warranty policy for your buyer. It is to offer an extra sales inducement so the buyer will purchase your home instead of another house. An additional reason is to prevent the buyer from alleging you knew about a home defect but failed to disclose it.

These policies make the real estate agents look good with buyers because they eliminate a sales objection. Also, it prevents lawsuits after the sale closes if something goes wrong with the house. However, please be aware of all the policy exclusions.

Whenever I sell a house through a real estate agent I buy a one-year warranty policy for the buyer. Since something always seems to go wrong with the house shortly after the sale, these policies reassure buyers and eliminate headaches for sellers and realty agents.

Quiet condos

Question: My 74-year-old mother cannot maintain her North Dakota house anymore and I have to get her moved out before winter snows arrive. But she doesn't need a convalescent home or anything like that. One of her friends lives in a nice condominium building where my mother thinks she might like to move. What do you think of condominiums for older people? _ George S.

Answer: Condominiums can be excellent personal residences. I lived in one years ago and enjoyed it very much, except for the poor soundproofing. Since poor soundproofing is the number one complaint of condo dwellers, be sure to check it out carefully for your mother. Also ask current residents what they like best and least about the condo complex.

In addition, be sure to inquire about the financial status of the condo by getting the latest financial reports and asking about any planned major repairs or monthly assessment increases. Also ask if there are any pending lawsuits involving the homeowner's association. Another item to check is the percentage of renters; it should not be higher than 25 percent. Finally, be sure to review the association's covenants, conditions and restrictions as well as bylaws.

Robert J. Bruss is a nationally syndicated columnist on real estate. Write to him in care of At Home, the Times, P.O. Box 1121, St. Petersburg, FL 33731-1121. Questions of general interest will be answered in the column.