Agent A-Team or Solo Superhero? Finding the Right Real Estate Partner for Your Selling Journey in Wildwood Florida
When it comes to selling your home in Wildwood, Florida,…
January 29, 2024
If you’re in the process of selling your home, you’re likely already aware of the many expenses and hassles involved. From real estate agent fees to home staging costs, selling a home can quickly add up. But one expense that many homeowners may overlook is the value of a home warranty.
In this article, we’ll explore the benefits of a home warranty when selling your home, and why it’s important to consider one. We’ll discuss what a home warranty is, how it works, and what it covers. We’ll also explore the different types of home warranties available and the costs associated with them.
What is a Home Warranty?
A home warranty is a service contract that provides homeowners with coverage for repairs and replacements of home systems and appliances. It is not the same as homeowner’s insurance, which covers damage to your home caused by natural disasters, fires, and other events. A home warranty, on the other hand, covers repairs or replacements due to normal wear and tear.
How Does a Home Warranty Work?
When you purchase a home warranty, you pay an annual fee. If something covered by the warranty breaks down or malfunctions, you can call the warranty company, and they will send a qualified contractor to your home to assess the issue. If the problem is covered by the warranty, the contractor will fix or replace the system or appliance at no additional cost to you, aside from a service fee.
What Does a Home Warranty Cover?
Home warranties typically cover major home systems, such as plumbing, electrical, and HVAC, as well as major appliances, such as refrigerators, ovens, and washing machines. Some home warranties also cover smaller items, such as doorbells and garbage disposals. It’s important to note that home warranties vary widely in what they cover and do not cover, so it’s essential to read the contract carefully and ask questions before purchasing.
The Benefits of a Home Warranty When Selling
Now that we’ve established what a home warranty is, let’s explore the benefits of having one when selling your home.
Peace of Mind for You and the Buyer
One of the main benefits of having a home warranty when selling is peace of mind. For the seller, a home warranty provides reassurance that if something goes wrong with a major system or appliance during the selling process, it will be covered by the warranty. This can alleviate stress and anxiety and make the selling process smoother.
For the buyer, a home warranty provides assurance that they won’t be faced with unexpected expenses for repairs or replacements soon after purchasing the home. This can make your home more attractive to buyers, especially if it’s an older home with outdated systems and appliances.
Increased Home Value
A home warranty can also increase the value of your home. If a buyer knows that a home warranty is included, they may be willing to pay more for the home, knowing that they won’t have to worry about costly repairs or replacements soon after moving in. This can also help your home stand out in a crowded market and make it more attractive to potential buyers.
Faster Home Sales
In some cases, having a home warranty can help speed up the home sales process. If potential buyer knows that a home warranty is included, they may be more likely to make an offer, knowing that they won’t have to worry about unexpected repair costs. This can help reduce the time your home spends on the market and increase the chances of a successful sale.
Protection for Your Home While It’s on the Market
Finally, a home warranty provides protection for your home while it’s on the market. If a major system or appliance breaks down during the selling process, you won’t have to worry about finding a qualified contractor to fix it quickly, which could delay the sale of your home. Instead, you can call the warranty company and have them send a contractor to make the necessary repairs. This can save you time and money, as well as prevent potential buyers from being turned off by a home with a broken system or appliance.
Types of Home Warranties
There are two main types of home warranties: seller’s warranties and buyer’s warranties.
Seller’s Warranties
A seller’s warranty, also known as a listing warranty, is a warranty purchased by the seller of the home. It covers the home while it’s on the market and typically lasts for 6-12 months. If something breaks down during this time, the warranty will cover the repairs or replacements.
Buyer’s Warranties
A buyer’s warranty, also known as a purchase warranty, is a warranty purchased by the buyer of the home. It covers the home after the sale is complete and typically lasts for 1-3 years. If something breaks down during this time, the warranty will cover the repairs or replacements.
Costs of Home Warranties
The cost of a home warranty varies depending on several factors, including the size of the home, the level of coverage, and the type of warranty. On average, a home warranty can cost between $350 and $600 per year.
It’s important to note that in addition to the annual fee, there may be additional costs, such as a service fee for each repair or replacement. These fees typically range from $50 to $100 per claim.
How to Choose a Home Warranty
When choosing a home warranty, there are several factors to consider.
Coverage
First and foremost, consider the coverage offered by the warranty. Make sure it covers the major systems and appliances in your home and that there are no significant exclusions.
Cost
Consider the cost of the warranty, including the annual fee and any additional fees for service calls. Make sure the cost fits within your budget and that you’re getting good value for your money.
Reputation
Research the warranty company’s reputation and customer service. Look for reviews online and ask for referrals from friends and family.
Deductibles and Service Fees
Check the deductible and service fees associated with the warranty. Make sure they’re reasonable and that you understand how they work.
Frequently Asked Questions
Do I need a home warranty if I already have homeowner’s insurance?
Yes, a home warranty and homeowner’s insurance serve different purposes. While homeowner’s insurance covers damage to your home caused by natural disasters, fires, and other events, a home warranty covers repairs and replacements due to normal wear and tear.
Can I transfer my home warranty to the buyer when selling my home?
It depends on the warranty company’s policy. Some companies allow for the transfer of the warranty to the new owner, while others do not. Be sure to check with the warranty company before purchasing.
Are there any exclusions to a home warranty?
Yes, home warranties typically have exclusions, such as pre-existing conditions, improper installation, and cosmetic damage. It’s important to read the contract carefully and ask questions before purchasing.
Can I renew my home warranty?
Yes, most home warranties can be renewed on an annual basis.
What happens if the warranty company goes out of business?
If the warranty company goes out of business, the warranty may become void. Be sure to research the warranty company’s financial stability and reputation before purchasing.
Conclusion
A home warranty can be a valuable asset when selling your home. It provides peace of mind for both the seller and the buyer, can increase the value of your home, and can even speed up the selling process. When choosing a home warranty, be sure to consider it.
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