Making The Most Of Your Home Warranty

Advantages

There are several advantages that a home warranty can provide to a seller. First, a home warranty affords added peace of mind to potential buyers, as it assures them that major appliances and systems in the house are protected. This can make the home more appealing and increase its market value. What a home warranty cost a seller? On the surface, home warranty benefits for sellers are typically at lower cost, because of various limitations in coverage. Yet coverage is an affordable alternative for homeowners, who are looking for their home to stand out from the field of competition. A one-year policy for single-family properties is roughly $500-$600, but varies from company to company, and could include additional add-ons at the request of the homeowner. Usually, sellers have the ability to be covered while their home is listed, even if it’s for a limited time for minimal cost. Often the coverage will include a period of time while the home is on the market, but in a sense, the clock doesn’t start ticking until the buyer settles on the home. The homebuyer and seller can always negotiate prior to entering into an agreement, but if the listing was marketed as including a warranty for the buyer, the cost of the policy would usually be deducted from seller proceeds on the sale of their home. Though there is a cost to the seller, it generally isn’t an upfront cost, which is appealing to many who deploy this tactic. Additionally, as implied above, a warranty can act as a selling point, giving the seller a competitive edge in a crowded real estate market. It can demonstrate that the seller is confident in the condition of the home and is willing to stand behind it. Of course, in a seller’s market, warranties are seldom employed, because there’s less incentive to stand out from other listings when buyer activity is high. Yet, in these instances, home warranties can still play an active role. They give sellers more negotiating power and should anything break before the closing, there’s an added protection in place. By investing in a home warranty, the seller can avoid potential disputes or costly repairs that may arise during the transaction, ensuring a smoother ride for both parties. Overall, purchasing a warranty can be a smart move for sellers (albeit, it’s not for every situation) , providing an extra layer of protection and enhancing the attractiveness of their property.

Common Misconceptions

Here are a few myths about home warranties. One misconception is that a home warranty is the same as homeowners insurance. While both can provide protection for your home, they cover different things. Homeowners insurance typically covers damage from natural disasters, fire, theft and liability, while a home warranty covers the repair or replacement of major systems and appliances due to normal wear and tear. There’s a big distinction there, and one that should be made. Next, some have the idea that the cost of basic warranty coverage can be quite expensive, but most enrollment for a year is only a few hundred dollars depending on the square footage and location of the home. Always do your homework, check with various providers and get quotes in order to keep costs reasonably low. Another myth is that home warranties are unnecessary. Some homeowners may believe that their new appliances or systems won’t have issues, so they view the warranty as wasted money. However, even new items can develop unexpected problems (they’re called lemons), and a home warranty can provide peace of mind and financial protection. Furthermore, if you’re improperly using or not caring for your home’s systems or appliances, a warranty won’t do you much good. Homeowners are personally responsible for properly maintaining their systems and appliances. Any intentional damage caused to a system or appliance will not be covered. Any neglect shown to a home’s system or appliance will also meet the same fate. Additionally, some people wrongly assume that all repairs and replacements will be fully covered by a home warranty. It’s essential to understand the terms and conditions of your warranty, as there are often limitations, deductibles and exclusions. Finally, there is a misconception that home warranties are only valuable for older homes. While it’s true that older homes are more prone to issues with systems and appliances, a home warranty can benefit homes of any age. It’s important to separate fact from fiction when considering a warranty to ensure you make an informed decision.

Maximize Your Home Warranty

In order to get the most out of a home warranty you have to understand the coverage and limitations before making any claims. This includes knowing what is covered, the dollar limits, and any deductibles or service fees. This is a critical step and the reason we suggest that you understand your terms and conditions well. If a repair person needs to come to the property, you should have an understanding of what repairs are covered and an idea of what questions to ask the service technician. Obviously, you’ll also want to be on site when the repair tech arrives. Keep in mind that maintaining regular and proper maintenance of the home’s systems and appliances can increase the chances of a successful claim. Moreover, it’s important to keep documentation of any repairs or maintenance done on the covered items. Finally, homeowners should familiarize themselves with the claims process and promptly report any issues as soon as they arise. Being proactive and responsive when dealing with repairs can ensure a smooth and efficient resolution. If an appliance fails, best practice is to contact the warranty company directly and right away. Normally, it isn’t best to send for your own repair person, at least without first reporting it to your warranty provider. While you may be able to hire your own contractor or technician, and it doesn’t hurt to ask, often you’ll need to rely on the services of a repair person endorsed by the warranty provider. By maximizing knowledge and taking necessary steps at the appropriate times, homeowners can make the most of their home warranty and enjoy the benefits it provides.

For more information about home warranty coverage and to find a warranty that’s right for you and your home, click here.