Friday, November 29, 2019 / by Elizabeth Sorensen
What is a home warranty and who needs them? A home warranty is similar to insurance, as it covers some or all of the costs of replacements or repairs when a system in your home malfunctions or stops working altogether. They range in annual costs of $300-$900 and remove the middle man in the fixing process. Instead of finding someone to fix an issue, you will directly contact your warranty provider and they will set up the repair or replacement with the appropriate vendors. Your premium usually covers all costs, with the exception of a co-pay which is typically around $50.
If you’re wondering who should buy a warranty, they are usually recommended for first time home buyers who have rented up until that point. When you are used to having a landlord, a home warranty can fill that role in a different way. Home warranties are great for homes with both members in the work-force outside of the house or just busy family members who can’t always be home to wait for the repair person window or find the time to even get quotes for the best repair shops in the area.
Home warranties aren’t just for first time buyers, though. If your appliances are nearing the end of their life expectancy, now would be a great time to get a warranty. If all of your appliances were purchased in the same time frame, you don’t want to face the costs of them all failing at the same time. Warranties can save you time and money, especially in the first year of ownership.
However, many people don’t understand how a home warranty protects the home seller. First, it is a great marketing tool and offers peace of mind to potential buyers. Offering a home warranty with the purchase of your home, will give the buyer increased confidence- especially first-time home buyers who are already nervous about the process.
Secondly, once you place your home on the market, putting a home warranty in place, protects the seller while it is listed. Yes, part of the home warranty (depending on coverage selected) covers the homeowner. Should a previously working item fail, before ownership is transferred, eligible repairs/replacements can be covered under a seller’s policy. Some of these items may be discovered during the buyer’s home inspection and can be covered if they meet the necessary requirements.
Lastly, many litigations have arisen after closing when a dishwasher stops working or the furnace goes out and now the buyer is unhappy and wants to blame someone. Protect yourself from the headache and potential substantial financial loss that can occur in these unfortunate situations.
For a small investment, you can help your home to stand out from your competitors, as well as give your buyers a boost of confidence when purchasing your home. Most importantly, you will also be protecting yourself from possible lawsuits should a system or appliance fail within the first year after selling your home.
Please note that not all home warranty companies are the same and offer different coverage and plans. It is important to ask your agent for recommendations and speak to several companies before deciding.
If you’d like more information of home warranties or other ways to help your home to stand out when selling, please don’t hesitate to call me.
Haven Real Estate Group