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If
you are a homeowner, you probably know all-too-well how costly home repairs can
be. And, thanks to Murphy's Law, appliance break-downs seem to happen at the
worst possible time-like when you are selling your home. For this reason, it is
in the best interest of all home sellers to consider purchasing a home warranty.
A
home warranty offers many advantages to the home seller, the least of which is a
piece of mind that your major home appliances are covered in the event of a
break down. Most home warranties cover both parts and labor of your home's most
vital systems and major appliances. This protects the home seller from
potentially large, unexpected repair bills and also allows the buyer to purchase
the home with more confidence. Additionally, a home warranty is usually for the
term of at least one year, so any unforeseen repairs/replacements are also
covered well after the home has been sold. It is arguable that homes that have
home warranties sell faster, for a higher price, and with less inconvenience. A
home warranty provides a competitive edge over those homes without warranties
because it communicates confidence to the homebuyers. This can add up to a
faster selling period, resulting in a more convenient process for all involved.
A
home is probably the single largest investment you'll ever make, so the last
thing you want as a home seller or buyer, are unexpected home
repairs/replacements. Major appliance replacement can cost you several thousand
dollars, and during the process of a home sale/purchase, your budget doesn't
often allow for costly expenses. A home warranty is designed to protect you from
these types of expenditures. Furthermore, it is convenient for home sellers
because a home warranty offers after-sale liability. While an inspection may
find many faults that are covered by a home warranty, it cannot account for
latent problems that are beyond an inspection's scope, or problems that occur
down the road. In most cases, a home warranty will cover these expenses,
alleviating potential financial burdens for the seller once they have sold the
home. When
considering a home warranty, it's important to ask the right questions.
Warranties vary from one company to the next and there are also many different
types of coverage available. Your real estate agent should be able to help you
with this process. First and foremost, you should find out what components of
the home will be covered by the warranty. It's also important to attain annual
costs and the charge for service calls. You will want to ask what the total
dollar limit is on the warranty and what the limits are for the individual items
that are covered. Many home sellers purchase home warranties, which are then
passed along to the homebuyer when they move into the home. As a homebuyer, you
may want to look into whether or not the coverage can be renewed once the
warranty has expired. In
2000, about 20 percent of the homes purchased nationwide were covered by a home
warranty. The average number of claims per warranty was about one-and-a-half.
The number of home warranties is increasing with every year because homeowners
are becoming more informed of their benefits. I predict that home warranties
will eventually become commonplace, as buyers and sellers realize the advantages
that they provide. Ultimately, what it comes down to is that a home warranty is
a very simple, cost-effective way to purchase a piece of mind for both
homebuyers and sellers alike. |
