What provision states that sellers are responsible for loss in value or damage to the house before closing?

The provision that states that sellers are responsible for loss in value or damage to the house before closing is known as the Risk of Loss. This term is an important legal concept in real estate transactions, which outlines the responsibilities of the parties involved regarding the condition of the property during the period between signing the purchase agreement and the actual closing of the sale.

When the Risk of Loss provision is included in a contract, it specifies that the seller bears the financial responsibility for any damages or changes in value to the property until the transaction is officially completed. This ensures that buyers are protected from any unforeseen events, such as natural disasters or significant structural damage, that could diminish the property’s value prior to their ownership taking effect. It places a level of accountability on the seller, ensuring that the buyer receives the property in the agreed-upon condition or with the value expected.

Other options like a Homeowners Warranty primarily cover repairs and replacements for specific issues after closing, while terms like Loss of Value and Property Damage Clause may not specifically clarify who is responsible during the interim period before the sale is finalized. The clarity provided by the Risk of Loss provision is crucial in real estate transactions, reinforcing the expectation of property condition and seller accountability until the transfer of ownership occurs.