The way it used to be:
Buyer puts a contract on a house, goes through all the processes to get to closing, and a few days prior to closing would call his insurance company to get a homeowners’ insurance policy.
The way I prefer:
As part of the Offer to Purchase, we include this form which sets out the following three things:
– Maximum annual premium for Homeowners’ Insurance policy
– Maximum deductible (higher is better, in my opinion)
– Timeline for the Buyer to confirm that he can get sufficient coverage that fits within these limits.
Part of my job as a Buyer’s Agent in Charlottesville is to be aware of potential pitfalls and minimize surprises. With the proliferation of CLUE Reports, which essentially serve as CarFax reports for houses, sometimes a house can have a “bad credit report” which can impact a buyer’s ability to purchase affordable homeowners’ insurance.
If we can remove one variable from the equation, which this addendum does, we’ve achieved a simple win-win for both the buyer and seller.
The hardest part: explaining this form to other Charlottesville Realtors. 🙂