Tuesday, August 23, 2016

Why Choose a Home Warranty?

One of the first things that I suggest to my home sellers is to offer a home warranty as a perk to what is already a great listing.  It might seem like an added expense that you might not want to tack on to the closing costs of selling a home, but it really does offer a tremendous amount of value.


A Home Warranty Offers Peace of Mind for Sellers and Buyers

Buying a home can be a very expensive proposition. Between down payments, closing costs, moving expenses, and just the general money drain that random trips to Target to outfit the new home, finances can be tight. Thinking about having a large enough emergency fund to cover major home issues, like a broken dishwasher or a blown air conditioner or a roof leak, can seem impossible. A home warranty offers peace of mind to buyers, who know that for a year, at least a portion of those expenses will be covered.

For the seller, a home warranty can be retroactive as of the date the property went on the market. That means that if you are selling an empty property, or one with renters occupying, or just your own home, you are covered if something happens. You don't have to worry about having to pay for major repairs either.  The peace of mind is worth the expense!

A Home Warranty Makes a Property More Likely to Sell

According to Angie's List, homes covered by a warranty are more likely to sell.  A warranty is a great marketing tool, and can make the difference between similar homes and comparable price points.  In fact, a warranty may actually lead to higher offers because buyers feel more secure providing more of their upfront cash to the seller when they have a safety net in the warranty.

A Home Warranty Isn't a Bumper to Bumper Fix

It's important to understand what a warranty covers. Most warranty companies will offer different packages, at different price points, that cover a varying amount of systems in the home.  You may opt for a basic package, which really covers the four walls and the major systems (AC, water heater), or you may choose an upgraded package which covers all of the appliances as well as some other options. It's important for both sellers and buyers to read the fine print, so that they understand what a home warranty will and will not cover.

When I list a home, I always suggest a warranty--and often provide it myself, from the proceeds of the sale.  It's a worthwhile investment that brings additional value to the home and to the listing. 

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