I have a flip in Decatur, GA that was supposed to be a rehab but due to some city ordinance craziness and a long delay turned into a tear-down and new construction. House is now done and beautiful and on the market but my agent is telling me that in order to sell I need to include:
1. a buyers walk-thru punch list repair at/near closing
2. warranty from me for the first year of ownership
3. a purchased "2-10" warranty for the house, which I'm told is about $5k
These are things I didn't know about and wasn't necessarily planning for since it was going to be a rehab. Is this all true? Would it make sense to "outsource" #2 above to a home warranty company to manage the first year? Is $5k reasonable for the 2-10? Any direction, advice or tips would be helpful.
#1 & #2 are pretty typical for builders to offer new homes here in Atlanta.
#3 is also pretty typical and I would recommend as a CYA.
2-10 Warranty is who we use for all our new builds and it is based on the value of the home. There is also a small initiation fee if your builder is not already a member.
Who is your GC for this project? You should be able to work out some of these things with them. I can send you my contact with 2-10 as well if you would like so you can get an exact quote direct from them.
Thanks @Todd Whiddon . It's good to know none of this is way out of line. I have already been in contact with 2-10 but thanks for the contact info. We are in the process of getting signed up with them as members now. I have also found a GA company to manage the first year of warranty for me as I don't want to be directly involved in that. Overall I think it will work out pretty well. My GC is a guy who I have partnered with on this deal and he is also a licensed agent. He ran the flip and I was the money guy. Just signed the contact, hoping to close in early July.
By the way, my 2-10 Warranty ended up being a good bit less than anticipated. Around $2400 including membership fee. Happy about that!
in regards to the punch list what does your realtor want you to do? Type up a piece of paper that says punch list on it and hand it to prospective buyers? The buyer will create their own punch list pre closing that you can look over and make decisions on - I'm not sure what your realtor is looking for.
@Joseph R. , he was just telling me to expect a punch list that had to be addressed before closing, which I wasn't expecting. Guess I should have been. Hopefully it won't be too bad.
You must be a BiggerPockets member to post on the forums
Join the world's largest, most open Real Estate Investing Community online, 100% free forever!