Choosing a Homeowners Warranty
When homebuyers are going through the home closing process, they’ll typically come across what is called a homeowner’s warranty. This warranty is a protection plan that covers a significant portion of the costs if certain appliances malfunction or stop working completely. Having a homeowner’s warranty can certainly be beneficial for new homebuyers, but it can also help home sellers add value to their homes. Find out what a homeowner’s warranty entails and how it can benefit multiple parties during a home closing.
What is Covered in a Homeowner’s Warranty?
Typically, a homeowner’s warranty will cover the repair or replacement of the major systems and appliances in your home. This often includes items like the water heater, garbage disposal, plumbing system, refrigerator, washer and dryer, air conditioning unit and other similar systems. If one of the covered systems or appliances breaks, the warranty covers repairs from a contracted local technician or a complete replacement of the item or system. In some cases, you may have to pay a small fee to carry out the repair or replacement, but the fee is typically much less than the total cost would otherwise be.
Your individual homeowner’s warranty may vary slightly from other warranties, so it’s always important to read through your warranty plan carefully and ask about any extra services you’d like to have included.
Homebuyers should also understand that warranties are not substitutes for home insurance. Furthermore, not all warranties cover repairs or replacements for appliances that simply haven’t been properly maintained over the years. That’s why it’s also a good idea to get a thorough home inspection from a trusted professional.
How Can Homebuyers Benefit?
After paying all the costs associated with the home closing process, nobody wants to be caught off guard by a malfunctioning heating system that will cost several thousand dollars to repair. Having a homeowner’s warranty gives new homeowners the peace of mind of knowing that they can quickly and inexpensively have those issues resolved.
This type of warranty can be especially beneficial for first-time homeowners who aren’t particularly handy or who have limited knowledge about what types of major malfunctions can occur in a home.
How Can Home Sellers Benefit?
If home sellers are working within a buyer’s market or if they are looking for ways to make their home more marketable, offering a home warranty with the house can be a great added incentive to encourage wavering homebuyers.
While this offer will add value for homebuyers, fortunately, it isn’t too costly for home sellers. Home warranties typically costs between $200 and $500, making them a relatively small investment for those who are looking to sell their homes.
Whether you’re a homebuyer looking for peace of mind after closing or a home seller interested in presenting a more attractive overall package to potential buyers, a homeowner’s warranty can make a great addition to your home closing process.