As the ongoing search light continues to focus brightly on all parties associated with residential real estate for blame of the five year economic malise, it only makes sense that thoughtful entreprenuers will come up with new ways to protect the parties involved in residential sales transactions. This week we received news that a new insurance product is being offered to protect lenders and investors from losses when “a valuation inaccuracy is discovered.” So, now we have appraisal protection and title insurance. Having valuation insurance sure sounds like a good idea to help add a few more costs to each transaction. Just think, if such insurance is available, why do we really need full appraisals? What would happen if the market just did its job and residential real estate values were determined in a real market based system…closer to an auction than an arbitrary list price?
Since we are now on the path of providing purchasers with all kinds of protection, most likely at the seller’s expense, I have a few new ideas that I would propose should become part of all transactions.
Mortgage Qalification Insurance- if you learn that a lender allowed you to borrow more than you can handle, and now you are cash strapped and having difficulty making payments, put in a claim against your lender. They are the 1%..right? Let them pay your mortgage since they loaned you too much!
Home Inspection Insurance- That home inspection did not catch the gfi circuit breaker that is not tripping and you are concerned is a hazard? No problem, file a claim on the Inspection policy and get the funds to make those repairs!
Poor Decision Insurance- this is a nice way to say that your Realtor led you to a home that you fell in love with, and now feel is a mistake. Call it buyers remorse, just don’t lose any sleep over it! You are with the good hands who are just going to pay you for the home since you have a Poor Decision policy. What a great way to buy a home, knowing you are protected if the home is a lemon, or just not enough room at the holidays!
There are so many parts of life I would like to insure. How about the risk that your kids make bad decisions that cost you several thousands of dollars? Call it Parental Protection Insurance. Or how about your spouse who no longer excites you. Middle Age Crisis insurance can help fund your new sportscar and more!
Maybe I need to change careers. I could really create some great coverages. Too bad I did not take out a Wild Card Policy for all of my ideas…