DEAR BOB: I recently purchased my first home, a townhouse condominium. While getting acquainted with my new neighbors, the subject of insurance came up. One of my neighbors, who rents her townhouse condo, says she has a renter’s insurance policy. Since I am an owner, do I also need a renter’s insurance policy? –Nancy B.
DEAR NANCY: No. As a condominium owner, you need a condominium owner’s insurance policy. It will protect you against negligence liability, such as when somebody is injured in your condo. The policy also provides coverage for fire or other damage to your furnishings, theft, accidents and damage to the interior of your condominium.
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The homeowners association carries a master insurance policy on the buildings and common areas. This policy provides liability coverage and for structural loss such as due to fire, wind, water damage (but not flooding) and other coverages.
If you buy your condo owner’s policy from your automobile insurer, you may be entitled to a multipolicy discount. Also ask the insurance agent if you need an inexpensive umbrella liability insurance policy to protect against large losses due to your negligence.
SOLUTION TO THE 90-DAY LISTING PROBLEM
DEAR BOB: Thank you for your suggestion a few months ago about listing a home for sale. We took your idea to sign a 180-day listing but with an unconditional cancellation clause after 90 days. Because the home-sale market in our town is slow, we didn’t receive any purchase offers during the first 90 days. But the agent was doing a very good job, advertising our home, and holding open houses. So we decided to give her another 30 days before canceling the listing. Thankfully, she found us a buyer and everything turned out well. However, if we didn’t have that cancellation clause in our long listing, I’m afraid we might still be waiting for our home to sell. –Clancy H.
DEAR CLANCY: Congratulations on using a 180-day listing, including a cancellation clause, to your advantage in a buyer’s market. The threat of being able to cancel the listing after 90 days without cause gives the listing agent maximum incentive to get the home sold.
LOW HOME-PURCHASE OFFER FROM RELOCATION COMPANY
DEAR BOB: My employer is closing the office where I have worked for 14 years. But the company provides a relocation program and I decided to accept an out-of-town transfer. As part of the “package,” my employer offered to handle the sale of our house. Before accepting, we tried listing the home for sale with a local realty agent. No offers. So we decided to accept the employer’s offer to purchase our home. However, by the time we accepted, the employer’s relocation company dropped the price at which it would buy our home. We were told the market for homes in our area slowed down so the relocation company had to lower its purchase offer price. Is this legal? –Alan R.
DEAR ALAN: Because you did not accept your employer’s relocation company initial offer, there was no obligation to keep that offer open. The firm was within its rights to reduce the purchase offer price for your home.
Please be aware your employer’s relocation company will incur considerable costs selling your home, such as a real estate sales commission and possible fix-up expenses.
The new Robert Bruss special report, “Pros and Cons of Investing in Rental Houses and Condominiums,” is now available for $5 from Robert Bruss, 251 Park Road, Burlingame, Calif., 94010, or by credit card at 1-800-736-1736 or instant Internet delivery at www.BobBruss.com. Questions for this column are welcome at either address.
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