Furnace Rentals are becoming a concern

Posted by Cam Bird on Tuesday, August 29th, 2017 at 12:13pm.

Just a quick note to inform you of some recent findings about some Builders and Home Owners who have opted to replace their furnace and or water heater with a rented furnace-a service that is being offered by some or one of Saskatoon's furnace suppliers. Although this may sound like a great alternative to those who are requiring an upgrade to their heating system however if the thought of selling the home during the time of the furnace being a rental versus solely owned by the Seller, very few if any Buyers have shown any interest in assuming the rental agreement of an existing furnace or water heater. I have been involved recently in the sale where the Seller had entered into a rental agreement on the furnace and the Buyer had assumed the furnace was going with the home, however it was discovered prior to the possession date of the situation thus the Seller ended up buying out the rental agreement of the furnace which amounted to $9,000. The retail value on a normal style furnace purchased and installed will cost anywhere from $3500 to perhaps as high as $4500. In this situation the Seller still ended up paying for the furnace but double its value as per the rental agreement fine print.

My concern also has been discovering that some Builders are opting for having rental furnaces put in on Spec New Builds.. this reduces their capital cost outlay initially however the Buyer is expected to assume the rental agreement when purchasing the home.. once again at a significant cost over the time of the rental agreement. These rental agreements do at times cover servicing of the furnace such as new filters and checking for cracked heat exchanger.

Just one more thing to watch out for an ask the question when you are purchasing a new or existing home.

Happy Home Searching..

As always we are here to help should you have any questions regarding homes to sell or seeking to buy.

Cam Bird
RE/MAX Saskatoon

Leave a Comment

Format example: you@domain.com
Format example: yourwebsitename.com