Why Home Buyers Should Insist on a Home Warranty

If you’re buying a home, you’re taking on a big investment and a big expense. Most of us try to buy as much home as we can afford, possibly leaving us with little leftover cash for a while. If an appliance or major system in the home has a problem that we didn’t foresee, it can get very expensive. For this reason, many homebuyers look to new construction so that all the appliances and systems are new and under warranty.

However, it’s not necessary to avoid buying older homes. And, in today’s market, it’s easy to get a great deal on an older home. And, if you get a home warranty that covers the home’s major systems and appliances, you don’t have to worry that you’ll have to pay for a major repair in your new home.

Home warranties can be written to cover plumbing, heating and cooling systems, some structural systems like roofs and your major appliances, like the range. Home warranties can be constructed in many different ways to fit your specific needs. You can get the home warranty for the first year, and then renew at the end of the first year if you choose.

Home warranties are not expensive, but as a home buyer, you shouldn’t worry about paying for it at all. Rather, you should request it from your seller when you are negotiating the contract. In today’s market, sellers expect such a request, and are usually more than happy to provide a home warranty as an incentive to get buyers to consider their home for purchase. And, since they are not expensive, sellers are usually willing to allow you to choose the warranty, up to a certain dollar amount, and have them pay for it at closing.

You may even find that some home sellers are offering a home warranty as part of the sale of their home. However, if they are not, you should ask for it when you make an offer.

A home warranty can provide you peace of mind about the major systems you’re purchasing in your new home. With most home warranties, you call one number for any problem that you have and they find the right professional to complete the repair. Some even offer a toll free number that is open seven days a week. So, don’t forget older homes when you’re house hunting, and when you find the right home, don’t forget the home warranty.

Home Sellers: Offer a Home Warranty to Help Sell Your Home

Seller’s Warranty

Now that the real estate market is cooling somewhat, you’ll more likely to find your competitive home sellers offering a seller’s warranty. But what exactly is a seller’s warranty, and how can it help?

In short, a seller’s warranty provides added assurance that any repairs to major appliances, plumbing, and other home systems will be covered by the seller within a specified time period after the home is purchased, excluding a typical deductible of $50-60. Seller’s warranties are always offered by builders of new homes, but they’re becoming increasingly popular as sales tools for older homes, as well. For the seller, the cost is about $300-400, but it can be well worthwhile, especially if it means a quicker sale of their home.

There are some real estate companies that offer seller’s warranties at no cost to their sellers during the home’s listing period, such as Home Warranty of America, but the most agencies require their sellers to pay for the warranty if it’s something they’d like to offer potential buyers–with the cost often built into the sales price.

Home Buyer’s Warranty

A similar home warranty can be purchased by buyers, as well. The typical $300-400 cost is similar to what a seller would pay for similar coverage, and a buyer’s warranty covers the same things as a seller’s warranty. The main difference is that a buyer’s warranty typically begins on the date of closing and continues for a one-year period after that. Another difference: the buyer’s warranty can be renewed annually.

Besides Home Warranty of America, there are a number of other companies that offer home warranties for sellers and buyers. Those companies include: 2-10 Warranty, American Millennium (which offers a policy to specifically cover hidden structural or pest damage to a home), and Home Warranty Plans, but you’ll probably find others if you do an Internet search or check with your local real estate broker.

As is the case with any consumer product or service, it’s always wise to do some research before you decide whether a seller’s or buyer’s warranty is something you want to consider. Then, if you’ve decided that such a warranty is worthwhile in your particular situation, make sure to compare the various programs to see which ones are available in your area, what they specifically cover, their overall cost, the amount of their deductible, anything that might be excluded from the program, and any other variables before you commit. Remember, you can offer the warranty, but if you consider an offer less than full price, you can ask the buyers to provide their own warranty.

Providing this service adds to your home’s overall appeal to home shoppers. A home warranty gives your home buyers the peace of mind they seek.

Copyright © 2006 Jeanette J. Fisher

Home Warranties Are Not Just For New Homeowners

Most people are aware that home warranties can be purchased to cover a home you’re purchasing. They give buyers of older homes peace of mind about the major appliances and systems in the homes they’re buying, and the home’s seller will usually pay the cost of the home warranty for the first year. But, many people don’t realize that a home warranty can be purchased for any home, regardless of how long you’ve owned it.

Home warranties are purchased to provide warranty coverage on major appliances and systems that are no longer under the manufacturer’s warranty. Homeowners are free to purchase such coverage on their homes even when they’re not trying to sell and even when they’re not new homeowners. If you have several systems or major appliances that are getting older, a home warranty is a great way to minimize the out of pocket expense you can incur in a year, regardless of how many systems or appliances need repair in that year. Once you’ve paid for the warranty itself, you may pay a small deductible on each repair, but you won’t have to bear the full cost of the repair. Your savings could be very significant, particularly if you have several appliances or systems fail in the same year.

Home warranties are great for any homeowner who simply wants to ensure that they won’t incur an inordinate number of repairs in a single year. This can be particularly helpful when cash is tight. You have the peace of mind that comes with knowing that all the major systems in your home will be taken care of in the event of a problem, and knowing that the repairs won’t cost you an arm and a leg.

Home warranties are typically sold for one year periods, but homeowners can renew them year after year. The first year typically costs a bit more than the renewal, but even the first years charge is very reasonable for the protection you’ll gain.

Home warranties are a great benefit to every homeowner, regardless of whether you’re just buying your home, or you’ve been in it for years.