Good Business Practice or Underhanded and Sleazy? You Make The Call

Is this good business practice or sleazy? A local real estate office buries their request for a seller to buy a one year home warranty in their internal brokerage addendum, not in the agreement-of-sale.  I am all about transparency and I believe any part of the agreement negotiated between buyer and seller should be stated on agreement-of-sale or an official addendum, not an internal brokerage document.  I rarely have my sellers sign these documents since they have everything to do with the buyer and the services the buyers brokerage firm is providing the buyer and nothing to do with the seller, even though sometimes their offices will insist our sellers sign anyway.

So one could argue that the listing agent should read through every word of the buyers internal document if she will have her seller sign the document.  Especially if the buyers agent does not communicate that "by the way, the buyer is asking the seller to pay for a 1 year home warranty" .  In our real life example, it was oh by the way, your seller agreed to pay for a 1-year warranty and the cost is $670.  And yes, technically, if the seller signs the document, they are on the hook.  But is it right? 

I am a huge proponent of having a one year home warranty included on a deal.  I think they protect sellers and give buyers an extra level of comfort.  There is just a right way to include them on a deal and a wrong way to include them, or a good business practice and a sleazy business practice.  And not for nothing, I have never heard of a warranty costing $670 for a standard rowhome, have you?  That makes it that much more sleazier!

It is a bit suprising as my friend owns this brokerage office and maybe he knows that this clause is in there and perhaps has good intentions.  But those intentions will not go over well with co-operating listing agents in the long run.  Just be honest and transparent up-front and ask for the warranty in the contract or during the home inspection negotiations, not some clause buried in an internal addendum.

What are your thoughts?

Good business practice or underhanded and sleazy?

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