Home Warranty or Not?
I have a home warranty on my principal residence and on my rental property and I have used both. I think it's an excellent way to control repair costs and limit liability.
I just left a brokerage that didn't subscribe to that school of thought and didn't offer home warranties as part of their business model to limit liability for the seller or for the company. In a traditional brokerage setting I have always offered a home warranty and enrolled the seller during the listing period and then transferred the warranty to the new buyer at closing.
Home Warranties manage risk and if there is a breakdown the seller or buyer will know who to call when a problem arises.
The seller doesn't have to be the one to purchase the warranty. A buyer can offer to purchase a seller warranty in a contract of sale and if something comes up on the inspection it would be covered and at closing the warranty will transfer to the purchaser. This helps manage potential costs for the seller and makes that offer stand out in a crowd of multiple offers.
A home warranty will help manage a new homeowner's budget while controlling potential repair costs. In the current market, buyers are having to put down more downpayment leaving them with fewer funds for potential repairs. Having a warranty can help manage those risks.
The warranty that I typically offer notifies me every time my client makes a claim giving me an opportunity to check in on them and gives me opportunities for touch after settlement and strengthen that relationship and potentially reap the benefit of referrals.
But, be careful and read the fine print and the list of things that are covered, not all warranties are created equal and some have a bad reputation so make sure you are offering the right warranty for the home to be covered and if needed add a rider for things like well and septic, dual zoned HVAC, pool and hot tub and other unusual items.
Do you offer a home warranty with your sales?
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