Residential Service Contract: To Buy or Not To Buy

By
Real Estate Agent with Jeff Fritzson Real Estate, Ebby Halliday Realtors 0629874

You've decided it is time to leave your current home in Frisco TX and upgrade to a new one. You have contacted me and I come out to help you list your home. Everything looks great and we are going through the paper work and on page 4 of the listing agreement you are asked to initial whether you will buy a Residential Service Contract (RSC) at your own cost or not. What do you do?

Scenario 

We are two weeks into the listing and your water heater blows a leak. You had the check valve installed and it is also located in the garage, the water damage is minimal . However, now you have to repair or replace the water heater. Are you prepared to pay for all the parts and labor associated with that work? Would you rather pay for the one call to your RSC supplier and have them do everything?

Listing Insurance

When you decide to purchase an RSC, you are providing a home warranty for your listing. That means that depending on the agreed upon contract you may simply need to pay the service charge (typically from $50 - $90) for any repairs on your covered systems. These systems will vary from company to company but some typical systems that are covered include: heating system.furnace, air conditioning, ductwork, plumbing, clogs, water heater (even tankless), electrical system, ceiling and exhaust fans, alarm systems, door bells, dishwashers, garbage disposals, and on and on. 

If that wasn't enough you an usually get a seller's coverage policy for free with a minimal $50 - $100 for an upgraded version to cover even more such as refrigerators, washer, dryer, and your garage doors. You may wonder why a company would do this.

The model is that if you already have it covered and you accept a contract from a buyer, you can now say that they can now use the same company that has been covering your listing. When that is agreed upon, you will pay for the contract at the time of closing. 

The next time you decide to sell your home, you can call me, and when I come out to help you sell your home and we get to this decision, what's it going to be? Since you decided on me and I am looking out for your best interests, I will recommend you purchase the RSC. The last thing you want to have to do is replace any of these systems out of your own pocket when you are trying to sell your home. Unexpected expenses like this can significantly reduce the amount of money you will walk away from the closing. Avoid the expense and protect your home throughout the listing period.

My clients have already been through this learning experience and they all know at least one thing, when you work with me: Your Success is My Focus

Comments (5)

Teral McDowell
Referral Patners LLC - Murphy, TX

Some good points Jeff; more sellers should consider the possibilites as they really don't want to be making repairs when they are moving. I like your tag line.

Jan 29, 2014 07:52 AM
Joe Petrowsky
Mortgage Consultant, Right Trac Financial Group, Inc. NMLS # 2709 - Manchester, CT
Your Mortgage Consultant for Life

Good morning Jeff. Was not aware this kind of insurance was available. It sure does make sense especially if someone has moved out. Great post!

Jan 29, 2014 06:05 PM
Jeff Fritzson: Frisco Real Estate Pro
Jeff Fritzson Real Estate, Ebby Halliday Realtors - Frisco, TX
Your Success is My Focus!

Hi Teral - I know you are very much aware of this and take care of your clients very well. Thanks for your kind words.

Hi Joe - you got that right Joe. When I work with clients who will be leaving, I make sure they have something in place so I can take care of things for them. Thank you.

Jan 29, 2014 10:40 PM
Kathleen Daniels, Probate & Trust Specialist
KD Realty - 408.972.1822 - San Jose, CA
Probate Real Estate

Jeff, I 've had many sellers have issues with AC, water heaters, dishwashers, etc. while their home is on the market. The seller coverage home warranty, which I provide to all of my sellers, covers it.  The coverage I provide is tied to my E&O carrier. My sellers also get $25,000 in E&O insurance. This is one advantage of being independent.  I recommend all sellers get the coverage. Your recommendation is a wise one ... but you already know that.

Jan 30, 2014 11:18 AM
Jeff Fritzson: Frisco Real Estate Pro
Jeff Fritzson Real Estate, Ebby Halliday Realtors - Frisco, TX
Your Success is My Focus!

Hi Kathleen - that is a very nice deal you have with your E & O carrier. Your sellers must be very thrilled to learn that from you as that is certainly a differentiator. 

Jan 30, 2014 10:28 PM

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