You get a warranty when you buy phones, computers, appliances, and more, but what about for your home? Yes, you can get a home warranty! These benefit both buyers and sellers and can be a valuable tool.
A home warranty is different than homeowners insurance. It covers many items not covered under your standard homeowner policy – filling a critical gap home protection. For example, if the dishwasher leaks and water damages the floor, the homeowner’s insurance policy may cover fixing the floor, but not the repair or replacement of the dishwasher. A home warranty will cover the dishwasher. So in many ways, they compliment each other.
For home buyers, a one-year home warranty is normally requested in the purchase contract, and even often paid for by the seller. The cost for a home warranty averages around $400/year. It is good for the first year after you purchase a home – and you have the option to extend it after that. With a home warranty, most major appliances, plumbing, and electrical systems are covered. For a little more money, additional items such as air conditioning and swimming pools can be covered. Buyers simply pay for the service call cost (which averages around $75), but not pay for actual repair or replacement cost for covered items. The contract covers repair and replacement of covered items, regardless of age, make, or model. This limits the risk home buyers have, and brings piece-of-mind.
Home warranties can also be very valuable for sellers. For example, if the new buyers move in the home and go to turn on the air conditioner and it does not work, someone may be blamed for it. Perhaps the buyers think the sellers knew of this problem and will blame them. Maybe they think the buyer’s Realtor, the seller’s Realtor, or the property inspector knew about it, or all the above! With the home warranty policy, the sellers are much more likely to maintain a good standing with the buyers. If any issues do come up, they will get repaired for the nominal cost of the service call. Quite simply, home warranty plans go a long way to prevent lawsuits and help everyone sleep better at night!
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