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Buying or Selling a Home/Limited New Home Warranty, Help Understanding

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Expert: John Hendricks - 3/12/2009


Question
I need clarity in the terminology relating to "procedure" for a latent defect.  Once sentence reads:

If a latent defect exists, the Builder will, at Builder's sole option, either (1) repair, (2) replace, or (3) pay to Purchaser the reasonable cost of such repair or replacement due to such latent defect; however, Builder shall not be obligated to spend more than a sum equal to the purchase price of the residential dwelling less the value of the land upon which it is situated to cure any such latent defect.

Can you help me understand THIS specifically:

Builder shall not be obligated to spend more than a sum equal to the purchase price of the residential dwelling

Thanks so much,

Trish

Answer
Dear Trish;

Thank you for your question regarding a “Limited Home Warranty”

Being a Realtor in California, to my knowledge the Builder/General Contractor is responsible for a period of 10 years from the close of escrow for latent defects in material and craftsmanship within the house. Appliances, fixtures are warranted for the manufactured limited warranty, usually up to a year.

The way I interpreted the paragraph you provided is that it is an explanation and acknowledgement of the Builder/General Contractors responsibilities after you take possession of the home.

The Builder/General Contractor is stating that the land cost does not apply towards the purchase price of the residential dwelling. When you bought the home, there was a land value assessed on the property and the costs of the dwelling was added to that value to get your overall costs. You should contact your Realtor or developer to obtain the value at the time of your purchase. The Builder is simply stating the cost of repairs, replacement of material, or money paid to you directly cannot exceed the cost of the residential dwelling alone at the time you purchased the property.

If you have further questions regarding a particular situation with your home, first contact the Realtor involved with the purchase and the Builder/General Contractor with a written statement of the problem with pictures if they can help with the evaluation of the problem. Allow them a period of 2 weeks to review, inspect, and suggest a remedy to the problem. If you do not get the satisfaction you feel that is required, contact the state licensing board to wage a complaint. Keep great notes of conversations and any written communication to support your file. You may want to contact a real estate attorney to review your case and prior to any action with the state licensing board just to make sure you are taking the right steps to resolve the problem.

I hope this helped a little, and thanks again for your question.  

Warmest Regards;
John Hendricks

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John Hendricks

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As a California Realtor for 23 years practicing in Marin and Sonoma Counties, it is now time to provide counsel through AllExperts.com to those who need advise in real estate. My knowledge and experience includes a wide range of resale residential real estate purchases, new home sales, income related investment properties involved in 1031 exchanges, and land. Let me help you in any of these areas...

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John Hendricks has established himself as one of Marin & Sonoma Counties premier Realtors. A native Californian, John is a well-known and respected Realtor in both Marin & Sonoma Counties who has resided in the Northbay since 1976. John began his real estate career in 1986, and since then has distinguished himself as one or Northern California's top producing Realtors. Before joining Frank Howard Allen Realtors, John was an associate of the Prudential California Realty from 1990-1992 where his outstanding sales achievements earned him one of the company's highest honors, the prestigious "President's Circle Membership", presented to the top 2% of associates for sales and earning excellence. Since his association with the highly regarded Frank Howard Allen Realtors in 1992, John has once again established himself as one of his company's Top 10 Producing Realtors in Marin & Sonoma Counties for the years 1993 through 2007 and now in 2008. Five continuous years of outstanding performance has now allowed John to join 15 other Realtors in the prestigious "Lifetime Hall of Fame" for Frank Howard Allen Realtors. John established a group of professional individuals who specialize in a variety of areas in real estate called, 'Lundmark-Hendricks Fine Homes' This group of professionals are dedicated to the success of representing clients with the greatest amount of care and service when either buying or selling real estate.

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California Association of Realtors National Association of Realtors

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Upon Request...

Awards and Honors
Frank Howard Allen Realtors "Hall of Fame Member" Chairman's Circle for 10 consecutive years

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Joe Louis & Sharon Sigurdson We want to thank you again for your excellent representation of interests during the recent purchase of our home in Petaluma as well as the sell of our home in Mill Valley. We had the unusual pleasure of working with you during the last year both as sellers and buyers. We felt that our interests were always paramount and that we received a very fair price for the sale of the Mill Valley house as well as our purchase of our new home. This speaks particularly well of you, because of the recent unstable and chaotic real estate market. Will Finke "Quite frankly, we came out of a very difficult situation, which time does not allow elaborating on. This was one of the greatest experiences of our lives as clients. John Hendricks is one of the top businessmen I have ever met." Bruce & Nancy Rosentreter "I chose John Hendricks to sell my house. I picked him because I thought he was professional, aggressive, and that he could get top dollar for my house. He fulfilled my expectations completely." Joy Schuelke "Since we were trying to sell a high end home in a very tough market, and in the middle of a very rainy winter, the prospects seemed quite bleak. I was convinced at the time, and am even more so now, that without John's tenure, patience, and tenacity, we would have not been able to move the property." Lynn McCarthy "I cannot stress strongly enough how impressed I was with the service provided to me by John and his group. Throughout the entire transaction, John was always available, always forthcoming with excellent advice based on his years of experience, and always willing to put in the extra effort to make this a positive experience for me. I feel lucky to have had the experience of working with him." Lea Lieurance-Turk "Thank you John for your outstanding real estate services for the past 5 years I have known you. You have made my dreams come true as far as selling and buying property."
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