If you're buying or selling a home, find out exactly what a home warranty is and how it can protect you.
What is a Home Warranty?
It is a 1 year service contract that helps protect homeowners against the cost of unexpected repairs and replacements of covered major systems and appliances that break from normal usage.
What Does a Home Warranty Cover?- Water heater- Heating system/Cooling system- Plumbing system- All major appliances- Electrical systemWhat it Doesn't Cover- Roof- Doors & Walls- Items not built-inOptional Warranties- Roof- Well pumps- Swimming pools, spasA warranty normally excludes pre-existing conditions, such as items that arenot in working condition when coverage is put in place.
Where can I get One?
Your REALTOR can provide you with the company information.
Many times a seller pays for and provides the coverage to the buyer as part of the transaction.
Ask for a "seller provided" warranty when making an offer on a house.
Many buyers purchase them for their own protection.
How Much Do They Cost?The cost for a basic one-year home warranty ranges from $325 to $425.
Optional coverage is per added item, such as pool, spa or well pump.
Each contract calls for a deductible payment or service call fee from the claimant directly to the repair contractor. This fee is usually $50 to $100.
The warranty company picks up the cost of repair above that amount.
Home warranties have proven to be well worth the cost of coverage.
As a buyer, use it as a negotiation tool in a purchase contract.
Why a Home WarrantySellers: A Home Warranty provided by the seller will be viewed as a benefit to the buyer. Adding a home warranty to your listing adds confidence and might result in someone purchasing your home over a newer home. Many people are nervous about old appliances and fixtures. Buyers are much more comfortable with a house that includes a one year warranty. The warranty can be promoted in the advertising as a drawing feature of the home.
It protects you should something go wrong after the buyer moves in. If a covered system or appliance repair is needed, the Buyer calls the warranty company, not you!This after-sale liability protection is well worth the cost of coverage.
Pay at ClosingThere is no charge to the Seller until closing. It is typically paid through escrow.
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