What Happens When You Buy a House? (VIDEO)
Emily Sperry July 13, 2017
‘What Happens When…’ is a video series in which we’ll talk about the most common insurance scenarios and how to get the most out of your coverage! Watch the whole series and more videos about insurance on YouTube!
Picture this: You’ve just bought your dream home. The whole process was a breeze. The sellers were willing to compromise on everything, and you got it for a steal.
So, you move in, and on your first night, you hear scratching in the walls. It sounds like…chewing—because it is. It’s thousands of termites chewing through your brand new house from the inside out, and suddenly, you have much bigger problems than how many boxes you have to unpack and where to put that ugly lamp that your mother-in-law bought you.
So what happens when you buy a house? Or what can happen during the home-buying process?
Well, unless you’re buying the house in cash, you have to have insurance on the home before you can close on it. And even if you can afford to pay for the house like that, you should still have insurance in place as soon as the property is legally yours. Otherwise, you’ve paid in full for something that, if an accident were to occur, you’d be paying thousands of dollars out of pocket to fix instead of one reasonable premium per year.
What Happens First?
When you buy a house, the insurance company will first inspect it. They want to make sure they’re not insuring a property that has anything hazardous that could cause a claim. If the property already has something wrong with it, they want to know so you can’t submit a claim later to try to get them to fix it for you.
Which brings me to my next point…
What About the Long Term?
You may not be aware of this, but even after a supposedly successful home inspection that yielded only some minor, easily fixable problems, your new property might have more issues that you’re not aware of. And whether you knew about them or not before closing on the new house, pre-existing issues are not covered under a homeowner’s policy. The insurance company does not sign on for any damage, neglect, or problems left behind by the previous owner, and it can leave you footing the bill.
Our advice to you? Since you can’t guarantee that every problem or concern will be addressed simply by a home inspection or the insurance company coming out to look out the house, be prepared to research the area to find out if it’s prone to any pest problems, infestations, flooding, or other things that could affect your home.
Also, ask your own questions to have peace of mind and full disclosure. It’s not that you don’t want the house, as every pre-owned home comes with its own quirks. It’s just that you’d rather be proactive than reactive, especially when these kinds of situations can lead to significant out-of-pocket costs if left too long.
What Happens Next?
Just keep in mind that what happens when you buy a house can be a lot more than you bargained for. So if you’re looking for a more extensive list of things to look out for or you want a consultation on a potential new purchase, give us a call today! We’ll help prepare you for all those scary “what happens when” scenarios!