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Thursday, December 17, 2015

Home Warranty - To Offer One or Not?

Home Warranties. They are a big thing these days. Everyone wants assurance that what they're spending so much money on is protected. If you're selling your home, should you put up the money to offer a home warranty to buyers? I think so.

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Of course your decision to offer a home warranty is entirely up to you. Your agent may or may not suggest or encourage it.

Offering a home warranty won't turn buyers away. But not offering one just might.

Yes, it's an additional cost. Generally under $500. Many sellers don't want to pay that, because it's not a guarantee that you will sell your house. But it will put a potential buyer's mind at ease.

To you, the Seller, what a home warranty means is simply that you (if you so choose) pay the fee for the home warranty and that's it. You're not on the hook for the cost of any repairs after the sale of your home. The warranty will cover it.

What a home warranty means for you, the Buyer, is if anything does break (that's covered under the warranty...usually this means appliances) within the first year of the purchase of the house, all you have to pay is the deductible, and the rest of the cost of the repair, or cost to replace the appliance, will be covered.

I offered a home warranty when I sold my last home. I also got a home warranty (paid for by the sellers) of the home I purchased. And I had to use it! Not long after moving in, the washing machine broke. I called the approved repair company (the home warranty company will have a list of approved vendors), they came out and assessed the washing machine. I paid the deductible (which I think was around $50 or $100) and I got a brand new washing machine. The one that came with the house was so old it would've cost more to repair it than to replace, but that is a decision that's at the discretion of the repair company.

Discuss with your realtor whether or not to offer a home warranty to your potential buyer. Or, if you're the buyer, you can put "home warranty" as something you want included in the the expense of the seller. Of course it's all a negotiation, as is everything in real estate. And home warranties are just another negotiating tool.

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