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Free from liens and encumbrances...

Posted November 15th, 2008 under pitfalls, say what?, smart selling.

There is one term that is almost always included in a purchase agreement, but which is very controversial. This term asks the seller to warrant that all fixtures and chattels included in the purchase price shall be in good working order and free from all liens and encumbrances on completion.

This means that if anything in the home breaks before closing -- be it a stove element, a toilet, a faucet, a drawer, or the lock on the door -- it must be repaired. Furthermore, if you as the seller have a rental water heater, rental furnace, or an alarm system, those items must be specifically excluded in the contract, otherwise you will have to pay for them out of your pocket. That's what "free from liens and encumbrances" means!

Many sellers do not realize that maintaining the home from top to bottom is still their responsibility. They believe that once they have a firm deal, anything that breaks via normal wear and tear is not their problem, when in fact, it must be repaired, however large or small.

Need to know more about liens and encumbrances? Just ask me, I'll be happy to help.


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