Choosing the Right Home Warranty Plan

Erika, great post on home warranties and can be so helpful with older homes and first time buyers.

Erika excellent explanation of a Home Warranty Plan, and when to or not request one

Good information on the differences, sometimes people hear warranties and think everything is covered not realizing what’s actually covered.

Great information, Erika Rae Albert, Austin Real Estate Expert. I appreciate the comment about checking service providers, too.

I generally recommend sellers purchase the home warranty as it protects them as well It's one less thing to worry about during the listing period and a nice 'gift' to the buyers.

Thanks for sharing,
Bruce

I always tell my buyers that they need to get a home warranty for at least the first year, gives them breathing room.. and then explain we will ask the sellers to contribute to it, but to be prepared that in this tight market , they may decline that option.
But you never know unless you ask!

There's no such thing as a free lunch.

If one thinks that having one of these plans is going to be better and cheaper than just paying for repairs themselves, they are kidding themselves.  

When your AC goes out in the middle of a heatwave, you are going to be last on the list for getting help.  

Everyone thinks they are going to be the one who gets the free air conditioner.  Show me how that's possible.  On average, the most you are going to get back is a fraction of your annual premium.  Someone has to pay for all of the costs involved in marketing and providing the warranties.

I think you have a better return on investment by playing the instant lottery tickets.  

Great information! Offering a home warranty can be a great way to bridge the gap on deals that are close but not quite there. We have utilized them in many situations. Thank you so much for the post.

Erika, Great feature and excellent blog and great way of explaining it.  Keep up the great writing.

Great and informative article.  While the home warranties aren't always great I have had clients who used them with both bad and good results.  But as the buyer is getting one they always have the option of using it vs spending their own money for repairs.   Had one buyer whose A/C went out the day after they moved into the home.  Another agent had a client whose well went out shortly after they moved in.  They were happy with their home warranty coverage after those incidents. So I always suggest them and send papework for the buyer to research which company they want. 

Hi Erika:

Here in my area it's common for buyers to request a home warranty for 1 year from the seller and to select the services. The costs really can vary, say if you have AC or a swimming pool, and by warranty company. They also tend to vary in terms of service and the quality of the techs.

Jeff

Interesting that the home warranty is actually part of your purchase contract.  We don't have any language like that and I seldom hear of buyers who want to get a home warranty over here.

Erika, great advice in your post, congratulations on your feature! We see home warranties a lot here and buyers like the peace of mind it gives them. I like that you point out comparing companies is a good idea. 

I commend you on your post and you have great points and the important thing is that you discuss this option with your clients ups front.  Since HPP’s vary greatly as well as vendor services and timing the HPP is not always the best reliance in case of an emergency.  In that situation I have explained to my clients to reach out to the HPP and tell them they can’t get that immediate service and often they will allow them to hire their own contractor and submit for reimbursement.  I always explain this process as well.

All states and areas differ so what the rules are in one area may not apply in another. Explaining this and finding out helps establish an after sale relationship as well.

Ending note....I’m not a huge fan of HPP’s and explain the pros and cons of them to our buyers so the expectations are set up.  It is however a standard seller paid item in many situations.  

Erika Rae Albert, Austin Real Estate Expert thank you for a great explanation of the Home Warranty.

Like so many things, there are times to ask for it and there are times it is not needed, as you explained.

Best wishes

Dear Erika,

Home warranties are great for nervous or novice home buyers. I never thought, I would have to tell people that they should check the lightbulb, if a lamp is not working, because I had a couple of people, who called their home warranty about this. $100 is a lot of money for a new light bulb, but probably also a lasting lesson in independence.

There is so much fine print with the various warranties--hard to get through. Some of them seem very service oriented and some seem to deny many claims. I've had one company deny the request for renewel b/c clients had 'too many' claims.