Making The Most Of Your Home Warranty
Advantages of a Home Warranty for Sellers
A home warranty for sellers can offer several advantages during the selling process. First, it can provide added peace of mind to potential buyers. It assures them that the warranty protects major appliances and systems in the house. That added protection can make a home more appealing, especially when buyers are comparing similar properties.
What does a home warranty cost a seller? A one-year policy for a single-family property is roughly $500-$600. Costs vary by company, coverage, and any add-ons requested by the homeowner.
Sellers may also have the ability to receive coverage while their home is listed, sometimes for a limited time at minimal cost. In other cases, coverage may extend throughout the period when the home is on the market. Then the buyer’s coverage begins after settlement.
The homebuyer and seller can always negotiate the details before agreeing. If the seller markets the home as including a warranty for the buyer, the cost of the policy is usually deducted from the seller’s proceeds at closing. This means there is a cost to the seller, but it generally isn’t an upfront expense.
Can a Home Warranty Help Sell Your Home?
A home warranty for sellers can also act as a selling point, giving the property a competitive edge in a crowded real estate market. It can demonstrate confidence in the condition of the home while giving buyers an added layer of protection after the sale.
Of course, in a seller’s market, warranties are seldom employed because there’s less incentive to stand out when buyer activity is high. Yet home warranties can still play an active role. They can provide another negotiating tool and added protection should something break before closing.
Ultimately, a home warranty for sellers can help reduce the risk of potential disputes or costly repairs during the transaction while helping the process go more smoothly. It’s not the right move for every situation, but for some sellers, the added protection and marketability can make it worthwhile.
Common Misconceptions About Home Warranties
There are quite a few misconceptions about home warranties. Understanding what they cover, and what they don’t, can help homeowners decide whether a warranty makes sense for them.
A Home Warranty Is the Same as Homeowners Insurance
While both offer protection for your home, they cover very different things. Homeowners insurance typically covers damage from events such as fire, theft, and certain natural disasters, along with liability.
A home warranty, on the other hand, generally covers the repair or replacement of certain systems and appliances due to normal wear and tear. There’s a big distinction between the two, and homeowners should understand both types of coverage.
Home Warranties Are Too Expensive
Another misconception is that basic warranty coverage is quite expensive. In reality, many plans cost only a few hundred dollars per year, depending on the home, provider, and level of coverage.
Always do your homework. Compare providers, review what’s included, and get several quotes before choosing a plan. The least expensive option isn’t necessarily the best if it doesn’t provide the coverage you need.
Newer Homes Don’t Need a Warranty
Some homeowners assume a warranty is unnecessary if their appliances and systems are relatively new. Unfortunately, even new items can develop unexpected problems. They’re called lemons for a reason!
A home warranty can provide some financial protection when those surprises occur. While older homes may be more prone to issues, warranties aren’t exclusively for older properties.
Everything Is Covered
A home warranty doesn’t mean every repair or replacement will be fully covered. Plans often have coverage limits, deductibles, service fees, and exclusions. That’s why it’s essential to understand the terms and conditions before purchasing a warranty or filing a claim.
Maintenance matters, too. Homeowners are responsible for properly caring for their systems and appliances. Damage caused intentionally, through misuse, or because of neglect generally won’t be covered.
How to Get the Most From Your Home Warranty
The best place to start is by understanding your coverage before you ever need to make a claim. Know what’s covered, the dollar limits, and any deductibles or service fees you’ll be responsible for. A little homework upfront can save you frustration later.
Regular maintenance is also important. Properly maintaining your home’s systems and appliances can increase the chances of a successful claim. Keep documentation of maintenance and repairs as well, especially for items covered under the warranty.
If something does go wrong, contact your warranty provider as soon as possible. Don’t immediately call your own repair person without checking the terms of your warranty. Some providers require homeowners to use an approved contractor or technician for covered repairs.
You may be able to hire your own contractor, and it doesn’t hurt to ask, but get approval from the warranty company first. If a technician is sent to your property, try to be there for the appointment and have an idea of what’s covered and what questions you want to ask.
Ultimately, getting the most from a home warranty comes down to understanding your policy, keeping up with maintenance, and following the proper claims process when something goes wrong.
For sellers considering whether the added protection makes sense before listing a property, learning how a home warranty for sellers works can help you weigh the costs and benefits. For more information about home warranty coverage and to find a warranty that’s right for you, click here.
