RECENTLY PURCHASE A HOME? THEN GET SOME PEACE OF MIND…

RECENTLY PURCHASE A HOME? THEN GET SOME PEACE OF MIND...


As a concerned Real Estate agent who has helped both buyer and seller, I always recommend that "someone" purchase a home warranty. That "someone" can be either the seller or the buyer.

What's a home warranty?

Most simply defined...it's an insurance policy, issued by an insurer, the covers the repair or replacement of the major appliances and systems in that new home you just bought. It's also a "peace of mind" item that can also be bought by a homeowner for those same items in his home, even if he/she has no intention of selling (I own one on my house)...


Generally, the items covered are ...the furnace, air conditioner, hot water heater, stove, microwave, disposal, and the sump pump. Additionally, some plumbing systems as well as some electrical wiring are cover for the repair or replacement for a specific amount of time...usually a year from purchase of the policy. There are riders that'll also provide protection for the refrig and icemaker, and both the washer and dryer. Additionally, doorbells, garage door openers, swimming pool motors can also be insured (I don't personnally know of anyone who has purchased this last 4 items).


This type of insurance policy has existed for several years, but only recently have they been modified to insure over pre-existing conditions and improperly maintained items. Additionally, the newer policies cover some removal and permits but for a full disclosure of limitations and policy provisions, I would urge a purchaser to review the contract.


My brokerage, Coldwell Banker, and I endorse only 1 carrier...American Home Shield, which is owned by ServiceMaster, although there are several other similar policies in the market place but I know little of their terms and conditions. Candidly, I've used AHS's policy...so I'm a believer.



Benefits Of A Home Warranty

Benefits to Home Sellers:

1. Having a home owners warranty enables you to attract more buyers for your home. Your home becomes more appealing to prospective buyers as they do not have to worry about repair costs for the major appliances.

2. Without a home warranty, you may have to deal with angry home buyers who knock on your door because you sold them a house which you knew had defective appliances. Consider the legal issues here. The low cost of buying a home warranty is much preferable than having to settle issues with your home buyer.

3. If a home buyer is deliberating over buying your home because the appliances and systems are old, having a home warranty will give confidence to the buyer to buy your property.

4. If you purchase the home warranty while selling your home, you will have to pay for it only at closing and thus need not shell out your own money.

Benefits to Home Buyers:

1. After closing the deal for a new home, buyers are typically low on cash. In such a situation, you definitely don't want to have to spend large sums of money in repairing major appliances. This is where a home buyer warranty can be very useful.

2. In most cases the home seller will buy the home warranty, but if they don't, you can ask them to purchase a home warranty. Most sellers will oblige in a bid to sell their homes. You will therefore not have to pay for the home warranty.

3. As a buyer you can have the satisfaction of knowing that the home seller is not trying to sell you a home with bad appliances which may break down and need repairs as soon as you move into your new home.

You have two choices when it comes to buying a home warranty:

1. You can buy the home warranty from a home warranty provider
2. Your gas or electric company may offer appliance service plans to customers for a modest monthly premium. These plans protect you against repair and replacement costs up to the period of the plan.

The basic American Home Shield home warranty can be bought for $420.00 per year but a policy with the additional optional coverages can be bought for $600-$700 depending on how many extra you wish to insure. ... Considering the rising costs of appliance repair and replacement, a home warranty is an absolute must for home sellers and buyers!