Guarantees That Home Buyers Can Rely On


Real estate often represents the largest purchase a person will make in their lifetime. As with any large purchase, buyers assume a certain amount of risk in their real estate transactions. It’s the reason any knowledgeable buyer will hire a competent inspector to make sure the home is up to code and problem free.

At the end of the day, those selling and buying homes have to follow through with a leap of faith. In most cases, the end result is a good one. But sometimes, it’s not.

Why We’re Asking:

Cars come with warranties. Stores let you return large appliances. Big purchases often have a safeguard built in, but such deals don’t always exist with houses. We’re curious to find out what happens when a home turns out to be a lemon. More importantly, we are interested in what realtors and real estate lawyers have to say about how home buyers and sellers can protect their investments.

Share your thoughts below:

What Liabilities and Guarantees are there with Real Estate?

If something goes wrong with a house just after purchase, can the seller or realtor be held liable?

Do houses ever come with guarantees and, if so, how are they enforced?

When problems arise, when is it necessary to contact a real estate lawyer?

What role do inspections play with regard to liability?

How should buyers and sellers protect themselves?

We’re excited to see what our realtors and lawyers have to say about defending against rotten real estate transactions.

Please post your answers in the comment field below!


  1. There is no such thing as a defect free property. During the inspection period in escrow it is imperative that inspections be conducted by qualified professionals. Sometimes the professionals find things out of their expertise and further inspections by more specialized inspectors should be ordered. Agents also have a responsibility to point out things they see, such as stains on the ceilings or puddles of water in the backyard, to get answers about why they have occurred.

    If you make sure that the inspectors are licensed correctly and are members of the correct trade associations you stand a better chance of limiting liability. Also, paying close attention to disclosures, Property ID and Preliminary Title reports can protect everyone later.

  2. If something goes wrong with a house just after purchase, can the seller or realtor be held liable? Yes! If a seller did had knowledge of a problem with the property or neighborhood that they did not disclose to the buyer they could be liable. If a realtor had prior knowledge of a potential issue that could affect the desirability of the home and did not disclose then the REALTOR could be liable.
    Do houses ever come with guarantees and, if so, how are they enforced? Resale homes do not have guarantees. In most cases there is a “Home Warranty” that is purchased that covers the home, appliances and major systems for the first year .


    It depends. Did the seller and/or realtor fail to disclose information that the seller or realtor was required by law to disclose? (Keep in mind that the laws differ from state to state and city to city) Did the seller knowingly misrepresent material information? Did the realtor have actual knowledge that disclosures made by the seller were inaccurate or misleading and not take steps correct the inaccuracies or misstatements? What does the purchase agreement state? Does the purchase agreement provide that the home is being sold ‘as is” with no representations or warranties? Was the problem something that a buyer could have discovered had the buyer conducted a thorough inspection prior to the sale? There are a lot of factors that come into play in determining whether the seller or realtor can be held liable. However, if either failed to comply with disclosure laws, or intentionally misrepresented information to the buyer, then the buyer may have a basis for action against that seller or realtor.


    I’ve never heard of a ‘guaranty’ with respect to a house. However, a homeowner may have warranties on big ticket items in the home that have not expired and are transferred to the new owner. Also, some homeowners obtain home warranty policies to cover repairs on the home for a period of time and transfer that home warranty to the new owner. The new owner’s rights and obligations would be dictated by the specific terms of the warranty policy.


    It depends on the problem. When a problem arises that is fairly serious and expensive, it is best to seek the advice of counsel early on in order to better understand your options. However, if a buyer runs into problems shortly after closing that resulted from inaccurate or incomplete disclosures made by a seller, it may be more productive for the buyer to contact his or her realtor and have that realtor contact seller’s realtor and try to resolve the problem. Even when involving an attorney, always seek to resolve the problem without resorting to litigation if at all possible. In many situations, the legal fees could easily exceed the cost of the damages, particularly if it proceeds to litigation. Would you spend $10,000 to solve a $5,000 problem?


    If a seller provided the buyer with ample opportunity to conduct an inspection and a problem arose after closing that could have been discovered through an inspection, the buyer will hard pressed to succeed in any action against the seller. If the buyer has a home inspection conducted and the inspector fails to detect a problem that clearly should have been detected, then the buyer may have recourse against the inspector. Even though most inspectors have a client sign waivers release them from liability, it still may be possible to pursue damages.


    AS A SELLER: A seller should take care to fully and accurately disclose information required on any disclosure form. Realtors typically keep up-to-date on what disclosures are required under federal, state and local law in a home sale. A seller should seek to sell the home ‘as is’ without any representations and warranties beyond what is required by law, or limit the representations as much as possible. Never, ever, intentionally misrepresent information on a disclosure form or in a purchase agreement. That opens a seller up to fraud claims. A seller may also want to consider the purchase of a home warranty policy that can be transferred to the buyer. This would also make the home more marketable and easier to sell.

    AS A BUYER: A buyer should seek strong comprehensive representations and warranties in the purchase agreement. Whenever information in a disclosure statement or in a purchase agreement implies that certain inspections were made, City actions taken, work completed or warranties obtained, ask for the documentation to prove it. When at all possible, get this information before signing the purchase agreement or allow for an ability to terminate the agreement if the information is to be provided after signing and not to the buyer’s liking. Sometimes a seller’s disclosure is unintentionally misleading because the seller doesn’t fully understand what he or she has or doesn’t have. Reviewing the actual documentation often can clear up the misunderstanding when it’s early enough in the process to do something about it. Hire a reputable home inspector and have the home thoroughly inspected before signing any purchase agreement. The knowledge obtained from the home inspection report can assist in negotiating a better purchase agreement.

    FOR BOTH A BUYER AND SELLER: Avoid ambiguity in the purchase agreement. It will lead to problems later.

  4. If something goes wrong with a house just after purchase, can the seller or Realtor be held liable? Yes

    Non-disclosure. There was a major defect that they were aware of yet did not disclose.
    -After the agents visual inspection they did not disclose pertinent findings, such as mold on the property.
    -Agent does not disclose a material fact the seller communicated to them.
    -Findings in the inspection report that are hidden or misrepresented.
    -Specific fraud. Aware of facts but intends to defraud the purchaser(s)

    Do houses ever come with guarantees and, if so, how are they enforced?

    A savvy Realtor will verify with purchasers in case of dispute, how they would like it to be handled. Once it’s added to the contract it can serve as a guarantee or hedge for the buyer and is enforceable in a court of law. While there may not be any specific guarantees for the house itself, they can guarantee how a future dispute would be handled. Your purchase agreement should mandate warranties and clearly spell out what to do in the case of questionable discoveries such as if that small leak, is really a massive one.

    Prior to purchase in many states buyers are required to purchase homeowners insurance. In addition, they can even obtain home warranties to provide coverage for the next 12 months for items such as repairs, unknown pre-existing conditions, pool, heating, electrical, appliances, dishwasher, stove, door bell, etc. Home warranties are an extension of what the average home insurance does not usually cover, such as systems or the cost to make a replacement.

    Remember, Realtors are not structural engineers, inspectors or appraisers. They are held liable for what they can visually see or what has been disclosed to them. In order for buyers to protect themselves it is very important that they have the home checked prior to closing, especially in AS IS scenarios.

  5. 1. The first priority should be title. Now that the title system has been corrupted, there is always the chance that some off-record activity could effect the quality of the title you are receiving. See my blog at
    2. The second issue is title insurance, where it takes negotiation by a knowledgeable person to get a meaningful title policy — or else when there is a claim or it is determined you can’t sell or refinance your property because of a cloud on title, you are going to be required to pay the piper then.
    3. Inspections are important: But the usual inspection is a cursory review just to satisfy the bare minimum requirements. I have ALWAYS advised my clients when purchasing commercial or residential property to hire an engineer to do the inspection rather than an inspection company. You get a much more thorough report and if the roof is about to cave in for reasons not apparent to the poorly trained inspector, you are more likely to find out.
    4. Normally, unless the seller is a developer there is no guarantee of the quality or workings of the house. But in some states, like Florida, if the seller knows there is a material defect they must disclose it. If you find out about it afterwards, then you must find and possibly sue the previous owner.
    5. Real Estate lawyers should be hired not when problems arise but when you are considering the purchase or refinance of your property. If you call him or her after you have signed contracts, then they can still do things but heir effectiveness will be hampered by what you have signed.
    6. Protecting yourself requires work, eyes wide open, and either asking the right questions or hiring the right professionals who will actually check on the representations being made to you.

  6. Just like a car, your house can come with a warranty. It happens all the time… You buy something, and within days or months,
    you’re stuck wondering what went wrong. This doesn’t have to be the case
    with your house. Just like a new car, your new home can come with a
    warranty too. Several companies offer home warranties that cover
    everything from pipes bursting, to the AC breaking down, to even the fridge
    going haywire. Virtually everything you can think of that could go wrong
    with a house has a backup plan. The cost is pretty affordable too. A basic
    one starts at a couple hundred a year and you can add on more coverages for
    a bit extra. In fact, when buying a new home, try and negotiate a little
    with the Agent you choose to try and get them to throw one in for you as
    part of the deal for selecting them. As a longtime Agent myself, I’d hate
    to see any dissatisfaction, or God forbid, blame or even lawsuits coming
    my way in the case of a home not being all its cracked up to be. So I make
    it a point to throw in a free home warranty for each of my clients. It can
    be up to $450 out of my pocket for the client, but the peace of mind for
    both myself and my happy buyers is well worth it in the end.

  7. The legal “landscape” dealing with residential real estate transactions is a constantly evolving picture. Buyers, sellers, contractors, land developers, and real estate agents have differing roles and responsibilities, often times at odds with each other, and all of which involve an interplay between several areas of the law.

    As a general rule, most residential home sales will utilize a standard form purchase agreement adopted by the state legislature or a trade association of real estate agents. This purchase agreement will contain provisions that govern the rights and remedies of the buyer and seller. The agreement requires the disclosure of certain types of pre-existing conditions to the buyer-like wet basements, leaking roofs, or broken furnaces. It also contains clauses that control how disputes arising out of the sale of a house are to be resolved. The buyer and seller can elect to have their disputes go to binding arbitration, or they can opt out, and retain their right to hire lawyers and proceed to seek a resolution through the court system.

    There are three main types of warranties that usually accompany new single-family residential construction. Most states attach an implied warranty that the home will be fit for its “intended purpose,” i.e. that it is fit for habitation. Many states require that all new homes also carry statutory warranties. These legally-required warranties vary from state to state, but where they exist, they generally cover warranties in three main areas: Defects arising out of poor workmanship (for example, doors that do not close properly), defects arising out of the mechanical systems ( plumbing, heating, air conditioning, etc.), and defects arising out of major structural items (like bearing beams, garage door headers, etc.)

    In addition to implied and statutory warranties, new home builders often provide express or written warranties guaranteeing the performance of certain item, such as concrete sidewalks or landscape. These express warranties may or may not be included in a new home construction contract, or added by a seller to a standard purchase agreement. The length and terms of express warranties vary and are dependent upon the terms in the warranty language. Consult a construction or real estate lawyer for help in interpreting these types of warranties.
    Note that homes in “common interest communities,” or homeowner’s associations created to run townhome or condominium developments, also often carry their own (similar) types of warranties. For example, many states require that common interest communities have a specific warranty against defects that involve the common elements-things like the roofs, the siding, and the green spaces in and around the buildings.

    Buyers are encouraged to use independent home inspectors to look at potential purchases in advance of the sale, as in most states, the fact that a building has been inspected and passed by the local city building official is not necessarily determinative of whether or not a house is fully free of defects. Government building inspectors are usually immune from lawsuits if they miss a problem with the house. Similarly, builders and sellers are encouraged to document any new warranty claims that come in. Some states require that homeowners provide builders with notice in writing of any warranty claims before a builder has a legal duty to do any repairs. Builders in most states are afforded the right to access to the property to inspect all warranty claims, and some jurisdictions require builders to respond to the warranty claim in some fashion (either with an offer of repair, or a rejection). Home buyers and builders should be aware that many states have set up informal dispute resolution processes (like mediation) for construction defect claims. These forums are intended to give the parties a place to resolve their dispute outside of the courts. The process to make claims against insolvent builders often differs from the process for claims against solvent builders. However, in both cases, homeowners and builders should seek legal advice to fully understand their rights regarding warranty disputes.

    The rights and remedies of home buyers, sellers, builders, and their agents is a complex arena. State laws contain a series of time limitations, or statutes of limitation, which provide a window of time for lawsuits to be served and filed. These statutes often have a harsh result, barring what might be otherwise a very real construction defect claim. The early consultation with legal experts is the best means to avoid losing rights provided under the law.

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