When buying or selling a home, a home warranty is usually always discussed in the closing deal. Learn how all parties win when a home warranty is purchased!
If you’ve ever bought or sold a home, you know that a home warranty is commonly included in the purchase. Home warranties benefit sellers, buyers, and both listing and buyer’s agents. Sellers will often provide a home warranty as an incentive to buyers, and buyer’s agents may purchase one for their clients as a closing gift.
What does a home warranty cover and how much does one cost? The price of a home warranty will usually vary, depending on which systems and appliances are covered. Most home warranties cover normal wear and tear or failure of at least some components of home systems and appliances not covered by homeowners insurance, such as electrical, HVAC, plumbing and large appliances like refrigerators, washing machines, dryers, built-in microwaves and stove ranges. Let’s take a closer look at how this coverage benefits everyone involved in a real estate transaction.
Sellers Get Peace of Mind During the Listing Period and Beyond
Selling a house can be stressful. Between boosting your home’s curb appeal, cleaning and staging it and even making sure it smells good during walk-throughs and open houses, there’s so much that goes into making your home marketable.
As a seller, you’re responsible if something breaks down in your home during the listing period. Not only can breakdowns during the listing period blow your budget and force you into even more debt – especially if you’re making two house payments – but they can also cause delays that force you to keep your house on the market longer. As you know, the longer your house sits on the market, the harder it can be to sell.
A home warranty can protect against reduced marketability, hassles and unexpected expenses during the listing period. But that’s not the only way a home warranty benefits you as a seller. Offering a home warranty as part of the sale can make your home more appealing because it offers buyers the confidence that comes with knowing they won’t be out of luck if covered systems or appliances break down right after closing. As a result, buyers are more likely to submit better offers, so you can sell your home faster and for more money.
Buyers Get to Move Forward with Confidence
A home warranty can help protect the buyer’s home for up to a year after closing and may be included in closing costs, paid for by the seller or, in some cases, the buyer’s agent. Buyers benefit from the convenience of a home warranty by protecting their budget from the costs of unexpected repairs after a home purchase. Because most buyers spend a significant amount for their down payment and moving expenses, the added protection of a home warranty is helpful for the first year after purchase.
It’s also much easier for buyers to find the contractors they need when they have a home warranty. Many home buyers may be unfamiliar with their new cities and neighborhoods and may not know who to call if something breaks down. As an American Home Shield® customer, you have access to a nationwide network of more than 15,000 contractors, which means that there’s likely an experienced contractor in your area. With AHS, the buyer can submit a request 24/7 online or via phone. Hence, they don’t have to do the legwork of finding and vetting someone themselves.
Listing and Buyer’s Agents Appreciate Home Warranties, Too
For both listing and buyer’s agents, including home warranties in real estate deals makes clients happier, which makes for smoother transactions and less stress for agents on both sides of the table. Listing agents like them because they make homes easier to sell, and they reduce the chance of disputes arising due to breakdowns after closing. There’s less stress during the listing period because breakdowns are covered, and listing agents are more likely to get word-of-mouth referrals from sellers who offer home warranties.
Buyer’s agents like home warranties, too, for many of the same reasons. Buyers are more interested in homes with warranties, and the sale becomes less stressful. Because a home warranty reduces the agent’s liability in case of a breakdown after closing, many buyer’s agents will offer a home warranty as a closing gift to their clients. And because warranties make transactions go more smoothly, buyer’s agents are more likely to earn word-of-mouth referrals when a warranty is offered as part of the sale.
Home warranties benefit all parties involved in a real estate transaction, and they’re just a good idea overall. Whether you’re buying or selling, don’t skimp on a home warranty — contact American Home Shield® today to ask about our coverage options.