| Imagine for a moment the following scenario: | | | | with a new one. Final walkthroughs are essential |
| After months of searching for the perfect place | | | | to ascertain the condition of the home prior to |
| to call home, you write an offer on a picture | | | | signing the closing documents. |
| perfect Minnesota lakeshore property. After a | | | | So what about those irreplaceable picturesque oak |
| little negotiation, the offer has been accepted and | | | | trees in the scenario above where the roof was |
| with the inspection over, you are on schedule to | | | | damaged? Three weeks prior to a closing, there |
| close on your dream home in 60 days. But then | | | | could be plenty of time for the seller to call their |
| Mother Nature strikes! Three weeks prior to the | | | | insurance company and have the home repaired. |
| closing, straight-line winds blow through the county | | | | But is it the same house? And more importantly |
| where your dream lakehome is located. Two | | | | does the buyer still have to buy the home? No. |
| picturesque oaks that were the focal point of the | | | | The clause goes on to say that in a case where |
| landscaping in the front yard were uprooted. One | | | | there is substantial damage to the home or |
| landed on top of your dreamhome and the roof is | | | | property, it is the buyer's option to cancel or |
| severely damaged. So, what happens now? | | | | continue with the purchase agreement. In the |
| Here is where the "Risk of Loss" clause comes | | | | situation outlined above, the landscaping was |
| into play. Risk of Loss is one of those "boiler | | | | changed and could not be replaced. The damage |
| plate" clauses in the purchase agreement that is | | | | to the home caused an insurance claim which |
| most often used in Minnesota. Being preprinted, | | | | would now be reflected in a CLUE insurance |
| some real estate agents will gloss over this clause | | | | report that could affect the ability to insure the |
| when reviewing the paperwork with their clients | | | | home. Buyers now have the right to cancel the |
| but just like every other line in any contract, it is | | | | contract with all earnest money refunded. |
| very important to understand. | | | | Risk of loss can come into play whenever buying |
| The section in the contract outlining risk of loss | | | | or selling a home during severe weather season. |
| states that the risk of loss due to any reason | | | | Most often, if the repairs can be made quickly to |
| whether an act of God or the acts of vandals will | | | | both the buyer's and seller's satisfaction, the |
| be the responsibility of the seller from the time | | | | contract will close on time. But when a property |
| the purchase agreement is signed until the date of | | | | sustains significant damage, it is important for |
| closing. | | | | buyers to understand what options are when |
| This means if there is a fire or accident, the seller | | | | purchasing a home. Note: The situation outlined |
| is required to bring the home into the condition | | | | here deals with purchase agreements for |
| that it was in at the time the contract was | | | | Minnesota real estate. Real Estate is LOCAL so it |
| written and signed. So if the ten-year-old | | | | is imperative that buyers and sellers contact local |
| dishwasher goes out a few days prior to closing, | | | | experts (real estate agents, brokers or attorneys |
| the seller would replace it. If a neighbor backs | | | | ( licensed in the state where the home is located) |
| over the mailbox at the end of the driveway, it is | | | | to understand options when a loss situation |
| the seller who must repair the post and replace | | | | occurs. |