I am a firm believer in home warranties.  I have a client who flips.  With each of his remodeled homes, I purchase a home warranty to go along with his listing.  This is a special service I provide to all of my regular clients who are in this business.  It is a great marketing tool.  We closed on a home last month that he beautifully renovated.  On the day that the new owners moved in, they went down stairs to find a soaked carpet.  The water heater, even though it passed the home inspection, failed. And as a coincidence...The drain pipe in the basement was backed up, which was also thoroughly gone through by a professional before my seller even started work on the home!! 

Everybody involved was so happy that the home warranty was there.  The home protection company called & promptly and addressed the problems.  It was such a comfort for the new home owners to know that this problem was going to be fixed, with a minimal cost to them. 

I believe that these protection plans are very important to the marketing of these project houses because they are usually sold to the contractor "as is" with not much of a disclosure.  The person who "flips" the home may have an inspection, and had done the work on the home, but has no real knowledge of the home other than what is on the surface.  This in turn is a great tool if your buyer purchase a home that you know had been "flipped".

The agent who represented the buyers of this particular home said after this turn of events he will be strongly looking into these programs for his sellers and buyers.  It saved a lot of heartache.

A warranty will usually cost around $400.  A mere drop in the bucket when you take a look at the cost of repairs to the home.