Home Warranties...Should You Offer One To Buyers...Should You Request One Of Sellers?

By
Real Estate Agent with RE/MAX Trinity Brecksville Ohio

Home warranties have gained much popularity in recent years and I am often asked by my buyers when negotiating,"Should I ask for one?" and by my sellers,"Should I provide one?"

In general, I think this is a good product, but take care to

 read the fine print.


For me personally they have paid off.  Two of my previous homes were protected by a home warranty. As unbelievable as this sounds, both of my homes had hot water tanks that failed, both a few days before Christmas! I called my home warranty company, hired an approved contractor and, in both cases, I had a new hot water tank the next day, all for the cost of my deductible, the first time $35.00, the second time $50.00. (Deductible costs have since risen).

So what exactly is a home warranty? In general it is an insurance policy (different from a
woman inspecting fine printhomeowner's insurance policy) that is issued for a period of one year and sometimes 13 months  from the date of title transfer for the new homeowner.. The average cost for the seller is approximately $400.00 but this can quickly go up if there are additional commodes, a swimming pool, etc.

 Read the fine print.


Some policies cover all appliances, and some charge more to cover the washer and dryer. I have never seen a policy that covers a leaky basment (due to structural  or foundation problems) and  I have not seen any that will cover a leaky roof, but will cover a "roof leak repair". The buyer pays the deductible. The average cost of the deductible to the buyer if he/she makes a claim  is $100.00 Most companies require that you call them FIRST before calling any contractors because you must obtain permission from them as to which contractors you may use.

Read the fine print.


These are some items that typically would be covered but there are many more depending on the company you choose:

  • plumbing
  • heating  
  • electrical
  • hot water tank
  • ceiling fans
  • garbage disposal
  • central vacuum
  • whirlpool tub 

house cracked in halfHome warranties can be good for the buyer and seller. Remember that not every home will be eligible for coverage such as those whose utilites are turned off.  I was told recently by a rep from one warranty company that there are even a few banks that will purchase the warranties for a buyer on a foreclosed home. Always ask if the home you are purchasing qualifies for a home warranty and don't forget to

Read the fine print!

If you are thinking of buying or selling a home this year, please call Barb Szabo. I'd be happy to talk with you.

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Kristin Moran
Owner - RE/MAX Access - KristinMoran@Remax.net - San Antonio, TX
San Antonio,TX - Real Estate - 210-313-7397

Barb - great info on home warranties.  I ALWAYS ask for one, around $400 but warn buyers that not everything is covered and you will pay a deductible but in the long run in some cases, YES, it can save you hundreds.  KM

Jan 15, 2009 05:48 AM #1
Rainmaker
553,608
Barb Szabo, CRS
RE/MAX Trinity Brecksville Ohio - Cleveland, OH
E-pro Realtor, Cleveland Ohio Homes

Kristin, Thanks for your comments. A company I used to work for used to put a notice in our mailboxes about once every 2 months that was titled,"These are all the buyers that did not call you this month because they had a home warranty.

Jan 15, 2009 05:51 AM #2
Rainmaker
216,697
Margaret Oscilia
Creative Concepts-Home Staging and Contracting, Salem Oregon - Salem, OR
Home Stager, Salem Oregon

It also can be a real comfort for buyers when they are buying an older or historic home!  This is good information as not all home warranties are the same and yes - read the fine print!

Jan 17, 2009 07:48 AM #3
Rainmaker
553,608
Barb Szabo, CRS
RE/MAX Trinity Brecksville Ohio - Cleveland, OH
E-pro Realtor, Cleveland Ohio Homes

Margaret, I'm a believer in them as we are in such a litigious society.

Jan 17, 2009 08:01 AM #4
Rainmaker
467,265
Midori Miller
Talk 2 Midori, LLC - Daytona Beach, FL
Online Marketing For Real Estate Professionals

I think that is a problem with any type of contract and a very good reminder...READ THE FINE PRINT!  Great post.

Jan 17, 2009 08:26 AM #5
Rainmaker
553,608
Barb Szabo, CRS
RE/MAX Trinity Brecksville Ohio - Cleveland, OH
E-pro Realtor, Cleveland Ohio Homes

Midori, Right you are. I make sure to read everything  before I sign on the dotted line.

Jan 17, 2009 12:01 PM #6
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Barb Szabo, CRS

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