If you’re thinking of buying a home or selling a home then you’ve most likely heard ‘home warranty’ being mentioned. Have you ever wondered why so many buyers request one or why as a seller offering one can put you ahead of the completion? We’re taking a deeper look into exactly what a home warranty is, why it’s important for buyers AND sellers and what coverage it provides.
So what exactly is a home warranty?
A home warranty is a service contract offering protection for a home’s major systems and appliances that is renewable.
What does a home warranty cost?
Policies vary between $300-$500 dependent on the coverage level you’re looking for and the type of property to be covered. However for a seller to have coverage during a listing period this can be covered for an additional cost at less than $100.
Why do I want to offer a home warranty to the buyer of my home?
While your home is on the market, this can be a stressful time and the last thing you need are delays and unexpected costs arising from breakdowns of AC systems or leaks on the plumbing systems and a lot of inspection issues can be resolved simply by offering the buyer’s a home warranty policy when they close on the home.
What does a home warranty cover?
A basic plan typical includes coverage for kitchen appliances, water heaters, plumbing, plumbing stoppages, electrical, heating systems, ductwork, instant hot water dispensers, whirlpool bath motors and pump assembles. Upgraded plans can include pool/spa equipment, washer/dryer, kitchen refrigerators, air conditioning and well pumps.
The benefits of coverage is a repair or replacement of the system or appliance that is covered under the plan with only a service fee due unless code upgrades are needed.
As a buyer the home warranty becomes attractive for many reasons; firstly this could protect the buyer from costly breakdowns after closing on a home. Buying a home is a costly process and many buyers find themselves without a lot of cash on hand after closing and the protection a home warranty can provide gives some peace of mind. Secondly, if the home inspection shows that an appliance or AC system, for example, is close to the end of its useful life, rather than kill the deal, a home warranty can keep things moving forward as the buyer knows that as long as their policy includes the AC coverage, then the cost for repair or replacement in that first year is covered by the policy, and even past this time if they choose to renew the policy.
For more information on home warranties and buying and selling real estate in the Tampa Bay area please email us or call us today at 813-530-5525