Last weekend I was watching the news and a story came on about a house in North Vancouver had just burnt to the ground. Here’s the kicker ~ it had just been sold! *lightbulb goes off * blogpost!!
So who do you think is on the hook?
The Buyers hadn’t spent 1 day in the house and likely had nothing to do with the accident, and yet once the contract has completed the Buyer would be responsible.
“How can that be?” you ask…well you need to understand the basic structure of a contract.
STRUCTURE OF A CONTRACT:
When you write an offer on a property it’s typical to write it with a few conditions like subject to financing; subject to sale etc. At this point we say you have an ‘accepted offer’ or ‘conditional sale’ and the subjects are likely open for about a week (depending). When the Buyers have satisfied themselves that the conditions have been met they then remove the subjects and now we say the property is sold and there is a firm contract.
DATES ARE HUGE!
Dates are huge in a contract! There is the Completion Date; Adjustment Date and Possession Date. Completion date is the day that money is exchanged and Title is transferred at the Land Title Office. The Buyer is officially the owner on this day. Possession date doesn’t usually happen until a few days later to allow for any problems in the transfer. So in our scenario you can now see that the Buyers of the burnt house would be on the hook. OUCH!
SO HOW ABOUT A LITTLE INSURANCE?
Let’s talk insurance! Clearly you can see at this point the need to make sure to have your insurance in place for when Title Transfers and your name is now on Title. I advise my clients to give themselves a little cushion and set up their insurance to be active a good day before completion.
It would be devastating to have the house you spent time searching for, found and fell in love with, waited weeks, perhaps months for the sale only to have it burn to the ground. But it would be catastrophic should you not have your insurance in place! Make sure to cover your butt! Click here for Insurance Canada’s Homeowner’s Insurance Checklist.
About the Author
A modern Realtor® for 4 years, Teri is passionate about and embracing Web 2.0, utilizing online marketing initiatives and social media to maximize exposure and sell properties! She earned a diploma in Radio Communications from British Columbia Institute of Technology (BCIT) which positioned her well with the knowledge and experience to anticipate the new media and new technology world. Teri’s background is in marketing and selling radio advertising for Rogers Communications Inc.
Teri founded the Fraser Valley Social Media Meetups to share her knowledge and facilitate learning and networking in her community of Langley, BC, as well as sits on the Communications and membership committees of the Langley Chamber of Commerce. Teri also consults with clients who need guidance with their social media strategy and content management. Most recently, Teri was asked to speak at Inman’s Agent Reboot Conference in Seattle and Portland. Known as @TLCHOME on Twitter… Teri is happily married and has 2 great sons and a step daughter.