The home selling world is full of jargon, and it can be hard to work through all of it in order to find the home sale that best fits you. One of these words is “Indemnify”, and it might look a little arcane at first. Never fear, though- this strange term actually has a very simple meaning, and it’s crucial to selling your home.
Defining Indemnify
Indemnify might be an intimidating term at first, but there’s nothing to be worried about. Indemnify is just another way of talking about a real estate indemnity, which is an agreement that you enter into with your buyer. This agreement- which often presents itself as a clause in your home’s contract- just says that any damages to the home after the contract is signed need to get paid for by the buyer. For example, if a hole in the roofing is discovered three days after the contract is signed, the seller doesn’t have to pay for repairs. Instead, with an indemnity clause, the buyer has to re-roof the home.
How An Indemnity Works
Indemnities are one of the most ingenious parts of home selling. Instead of having to keep paying for potentially dangerous areas of your home, the buyer enters into a contract that says they need to pay for any repairs or damages to the property. If you know that your home has a leaky basement, asbestos insulation, or lead paint, or anything that can be potentially hazardous to the next people living there, you need to tell the buyer– but you also need to get them to sign an indemnity clause. When they sign, they can no longer sue you for any personal damages that might result from dangers within the home.
What Needs To Get Specified In An Indemnity Clause?
There are several things that make up an indemnity clause in your contract. It specifies who is the buyer and who is the seller- or, in this case, the Indemnitor and the indemnitee respectively. If you’re selling to a business, you’ll also specify if the indemnity extends to the business, to the employees, or just to the person you’re directly working with. Further included is what it takes to count as an indemnity; some actions, like wilful damage or negligence, aren’t typically included under an indemnity clause. You also need to specify what will happen if the indemnity clause is triggered, and how the Indemnitor is supposed to pay for any damages that happen.
Getting Indemnity Insurance
Indemnity insurance can help when you’re renting your home because it will automatically default any damage costs to the renter. However, when you’re selling, it’s equally useful. Indemnity can protect your funds from future lawsuits or repairs, and that’s doubly important if you need to move fast. If you’re changing jobs, moving across the country, or even just finding a new place in a new city, you don’t want to stay tied down to your old home. With an indemnity, you’ve got total freedom from the place where you used to live, and the buyer has to pay for any repairs or clean-up on the site.
The Limits of An Indemnity
While indemnities may sound fantastic, they do have some limits. If a seller is found to have committed any kind of ‘gross negligence, they’ll oftentimes have to pay for the damages, and if they’re the ones willfully committing any of the damages– like if a seller crashes a car into the home, or sets it on fire, or purposely floods it– they’re likely to have to pay for the reparations. An indemnity clause will only stretch for as far as your buyer agrees it will.
What Does It Mean To Indemnify?
When you’re selling a house, you’re bound to encounter words that you’ve never heard before. There’s nothing to worry about, though- an indemnity is just a clause in your sale contract that means the buyer has full responsibility over your agreement, and they have to pay for anything that goes wrong. When you want to sell your house quickly, this is a great idea, and it’s simple to get indemnity insurance over your sale. Home-selling is easy when you understand what to do- and with an indemnity in your arsenal, you’re sure to have the perfect sale!