Thanks to Lenn Harley, Homefinders.com, for posting this. This is good advice for people buying and selling a home in New Braunfels, TX, too. Buyers should always request a home warranty (residenital service contract) if the seller is not already providing one. Sellers can reduce their risk and suggestions that they didn't disclose property conditions. Buyers will be out of pocket very little for items that break down in the first year. Please visit Lenn's blog to view and comment on the original post.
HOME WARRANTY. WHY MAKE SURE THAT EVERY RESALE HOME YOU SELL IS COVERED BY A ONE YEAR HOME WARRANTY AND MAKE SURE IT COVERS THE HEATING AND COOLING SYSTEM.
THE HOME WARRANTY. WHO PAYS? WHO IS PROTECTED?
A FREE One Year Home Warranty is included on every resale home we sell. I've been doing it since 1994. Why 1994?? Because that's when I left the mega broker and have been making my own decisions.
For one thing, it's good advertising. For another, I don't get the telephone calls 3 months after closing that the water heater flooded the mechanical room or that the furnace won't come on and the baby is cold.
It's part of my practice for risk reduction and public relations. It comes right off the top of my commission check. If an agent sells the house, the cost of the warranty comes off the top and then the split is made.
Of course, of it's in the contract that the seller provide the warranty, the seller pays it and I say thank you. I just make sure that the warranty provided coverage for main systems, heating and cooling. Some real estate megas have their own cheap policy that they give but it's too limited and the heat/cool is an extra. Fine, I just pay for the extra.
What folks don't focus on is that the warranty protects everyone after closing. These warranties are simply a cost of doing business and they are on my Schedule C as "promotion".
This is, in the grand scheme of things, little money. I am more interested in the big money.
What is covered by the One Year Home Warranty?
Home Heating Equipment
Cooling Equipment (not window air conditioners)
For the home I'm selling now, we'll add the pool equipment. The commission justifies that expense.
Courtesy, Lenn Harley, Broker, Homefinders.com, 800-711-7988.
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