I'm guessing this is a home warranty, the type that real estate agents sell. Though the home warranty benefits the buyer, it's the seller who usually pays for it as an inducement to help move the property. The real estate agent may also receive a commission for selling the home warranty.
If the title/settlement company failed to put the invoice for the home warranty on the HUD-1 Settlement Statement, it's likely because they were unaware of the warranty purchase or did not receive an invoice on time.
In Pennsylvania, real estate agents typically add language to the sales contract indicating that the seller will pay for the warranty. The problem is that title agents do not always receive entire copies of contracts and some do not look through the pages for additional contingencies. If the invoice isn't presented prior to HUD-1 preparation and the parties fail to do a good pre-closing HUD-1 review, items like this can slip through.
So, what do you do post [after] closing? If it was the case that the seller was to have paid for the home warranty, then contact the title/settlement company and the real estate agent pronto. The real estate agent had a responsibility to get the invoice to the company preparing the HUD-1. If they did, then the company preparing the HUD-1 had a responsibility to put that figure on the HUD-1.
The bottom line is that someone needs to contact the seller ASAP - before they spend all of the proceeds money. If the seller is unwilling at this point to ante up, then whoever made the error, in my opinion - either the real estate or title/settlement agent - ought to pay for the warranty and pursue the seller for reimbursement.
If we made such an error, that's how we would handle it. I do think, though, that this is a good reminder to EVERYONE to have their thinking caps on and engaged while reviewing the HUD-1. Don't assume it is right and if you find an error before or during the closing and you fail to raise it, you may be out of luck later.
If the title/settlement company failed to put the invoice for the home warranty on the HUD-1 Settlement Statement, it's likely because they were unaware of the warranty purchase or did not receive an invoice on time.
In Pennsylvania, real estate agents typically add language to the sales contract indicating that the seller will pay for the warranty. The problem is that title agents do not always receive entire copies of contracts and some do not look through the pages for additional contingencies. If the invoice isn't presented prior to HUD-1 preparation and the parties fail to do a good pre-closing HUD-1 review, items like this can slip through.
So, what do you do post [after] closing? If it was the case that the seller was to have paid for the home warranty, then contact the title/settlement company and the real estate agent pronto. The real estate agent had a responsibility to get the invoice to the company preparing the HUD-1. If they did, then the company preparing the HUD-1 had a responsibility to put that figure on the HUD-1.
The bottom line is that someone needs to contact the seller ASAP - before they spend all of the proceeds money. If the seller is unwilling at this point to ante up, then whoever made the error, in my opinion - either the real estate or title/settlement agent - ought to pay for the warranty and pursue the seller for reimbursement.
If we made such an error, that's how we would handle it. I do think, though, that this is a good reminder to EVERYONE to have their thinking caps on and engaged while reviewing the HUD-1. Don't assume it is right and if you find an error before or during the closing and you fail to raise it, you may be out of luck later.
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