Home Warranty - Waste Or Worth It?

Reblogger Gabe Sanders
Real Estate Agent with Real Estate of Florida specializing in Martin County Residential Homes, Condos and Land Sales 3090099

What does everyone think of a home warranty?  Dan and Amy Schuman of Cleveland, Ohio are asking.  I have mixed feelings, though I must admit I currently have a home warranty policy with American Home Shield.

Original content by Dan and Amy Schuman

 home warranties cover applicances

 

 

There are some who think home warranties are a waste of money, just another way for brokerages to profit off of consumers.  However, given the benefits to both buyers and sellers, perhaps they are a wise investment.

 

WARRANTY BASICS AND BENEFITS

I'll be honest, when I first got into real estate, I thought warranties were a waste of money. Over the years, I have started to have a new found respect for them as my clients have really seen beneftis.

In a basic sense, a home warranty covers you in the event appliances or major systems break down. In most cases, a warranty will cover things that your typical home owners insurance policy does not. Having both a comprehensive home owner's insurance policy and a home warranty will provide you will excellent coverage.

Most homes experience issues pertaining to mechanical systems and appliances on a regular basis. It could be once a year or every few years, you just never know when something will happen. That is why having the protection of a home warranty is a smart thing to do for both buyers and sellers.

FOR BUYERS

1. CONVENIENCE  - When covered by a warranty, you will have access to qualified contractors simply by calling an 800 #. This is especially nice if you are new to the area.

2. LONG-TERM PROTECTION - While a seller will typically pay for the first year of a buyer's home warranty, the buyer has the option of renewing every year. As your home ages, the likelihood of a problem increases. So for the long term, having a warranty can be a huge help.

3. PEACE OF MIND - There is a tremendous feeling of knowing you will be covered if certain problems arise.

FOR SELLERS

1. COVERAGE WHILE ON THE MARKET - You will get covered during the listing period and NOT have to pay for the policy until closing.

2. STAND OUT FROM COMPETITION - Offering a home warranty may entice a buyer to purchase your home over another that is not offering one.

3. ELIMINATES PROBLEMS AFTER CLOSING - If a problem arises after title transfer, it is better for the buyer to contact the warranty company instead of you.

 

DO YOU REALLY NEED ONE?

 

home warranty claims

 

We are not here to tell you what to do, but based on the chart above, claims are certainly a common occurrence. In fact, we get emailed every time one of our clients has a claim paid by the warranty company, and it seems like it happens all the time. From an agent's perspective, I do feel it provides tremendous value to both buyers and sellers.

When it comes to buying or selling a home that costs hundreds of thousands of dollars, spending $350-450 on a home warranty seems pretty minimal. If you think of a warranty as more of an investment than an expense, it will hopefully make  more sense.

 

If you liked this post, please subscribe to our blog. We always appreciate having new readers and more importantly, enjoy making new friends.

 

Here are some of our others posts that may interest you as well:

One Question That You Absolutely Must Ask Your Clients

5 Reasons Why Using A Local Agent Is Better

Cool Virtual Tool To Help Pick Out Paint Color

Is Social Media Killing Confidentiality?

Real Estate Agents Are Not Just Door Openers

 

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About The Authors:

Dan and Amy Schuman are agents with Howard Hanna, the area's largest real estate company. They live in Solon Ohio and specialize in Cleveland Luxury Homes, working with buyers relocating to Cleveland, and first-time buyers.

 

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Home Warranty - Waste Or Worth It? is the property of The Schuman Team and may not be duplicated or used without their written consent. ©February 2013

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Rainmaker
1,235,760
Wallace S. Gibson, CPM
Gibson Management Group, Ltd. - Charlottesville, VA
LandlordWhisperer

I NEVER recommend them for properties that are tenant occupied....without a definite appointment time, few tenants will wait for a "service window" and getting and returning property keys are not in the service provider's routine.

Feb 24, 2013 08:00 PM #1
Rainmaker
3,254,104
Sally K. & David L. Hanson
EXP Realty 414-525-0563 - Brookfield, WI
WI Realtors - Luxury - Divorce

  We recommend and use them ALL the time....and our very happy buyers have new furnaces, air conditioners, etc. etc. to show for a fraction of the cost.

Feb 24, 2013 08:15 PM #2
Rainer
442,366
Barbara Tattersall
Keller Williams Realty Metropolitan (Keene,NH) - Keene, NH
GRI

I have mixed feeling about the warranties.  When I owned my own business the office provided them for every seller and buyer of ours.  It was a great martketing tool.  People need to be educated as to the coverage process so the warranty is effective.  Happily it replaced furnaces, dishwashers, hot waters heaters and an electric range, among other items over the years.    The properties had been inspected, the sellers had not had previous  problems but time was up for those products.  I was glad the warranty was in place.

Feb 24, 2013 08:22 PM #3
Ambassador
1,973,736
Silvia Dukes PA, Broker Associate, CRS, CIPS, SRES
Tropic Shores Realty - Ich spreche Deutsch! - Spring Hill, FL
Florida Waterfront and Country Club Living
Gabe, home warranties certainly offer some peace of mind to those buyers who desire it. I find the ones that sellers can get at listing time advantageous as they will protect the seller as well from unexpected repairs found during inspections, a critical time in the contract phase.
Feb 25, 2013 08:52 AM #4
Ambassador
2,214,313
Wanda Kubat-Nerdin - Wanda Can!
Prado Real Estate South - St. George, UT
So Utah Residential, Referral & Relocation REALTOR

Gabe, I highly recommend them for properties that have sat for quite some time not occupied. I also recommend them on older homes where systems have some age on them. I just closed on a home last week and the furnace went out the day after they moved in! Thank goodness they have a Home Warranty in place!

Feb 25, 2013 10:18 AM #5
Rainmaker
4,797,311
Gabe Sanders
Real Estate of Florida specializing in Martin County Residential Homes, Condos and Land Sales - Stuart, FL
Stuart Florida Real Estate

Thank you for stopping by and taking the time to read my re-blog.

Nov 13, 2015 04:27 AM #6
Rainmaker
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Gabe Sanders
Real Estate of Florida specializing in Martin County Residential Homes, Condos and Land Sales - Stuart, FL
Stuart Florida Real Estate

Hi Wallce, thanks for taking the time to comment it is always appreciated.

Oct 10, 2018 06:35 AM #7
Rainmaker
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Gabe Sanders
Real Estate of Florida specializing in Martin County Residential Homes, Condos and Land Sales - Stuart, FL
Stuart Florida Real Estate

Hi Sandy, thanks for taking the time to comment it is always appreciated.

Oct 10, 2018 06:35 AM #8
Rainmaker
4,797,311
Gabe Sanders
Real Estate of Florida specializing in Martin County Residential Homes, Condos and Land Sales - Stuart, FL
Stuart Florida Real Estate

Hi David, thanks for taking the time to comment it is always appreciated.

Oct 10, 2018 06:36 AM #9
Rainmaker
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Gabe Sanders
Real Estate of Florida specializing in Martin County Residential Homes, Condos and Land Sales - Stuart, FL
Stuart Florida Real Estate

Hi Barbara, thanks for taking the time to comment it is always appreciated.

Oct 10, 2018 06:36 AM #10
Rainmaker
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Gabe Sanders
Real Estate of Florida specializing in Martin County Residential Homes, Condos and Land Sales - Stuart, FL
Stuart Florida Real Estate

Hi Silvia, thanks for taking the time to comment it is always appreciated.

Oct 10, 2018 06:36 AM #11
Rainmaker
4,797,311
Gabe Sanders
Real Estate of Florida specializing in Martin County Residential Homes, Condos and Land Sales - Stuart, FL
Stuart Florida Real Estate

Hi Wanda, thanks for taking the time to comment it is always appreciated.

Oct 10, 2018 06:36 AM #12
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