Should Sellers Offer a Home Warranty When Listing?

February 25, 2021

Real estate transactions and the process of buying or selling a home are often considered to be among the top of the list of life stressors. It's an arduous process, unfamiliar to most, with many opportunities for the problems to throw off plans or derail expectations. And, for most people, buying a home is the highest dollar expense they will ever incur in a lifetime. This adds up to an overwhelming amount of potential stress.

One of the first steps involved in selling a home is working through estimates to determine if the seller can be satisfied with expected proceeds. As all the data of anticipated expenses are laid out, one such cost to consider is purchasing a home warranty. With so many mandatory fees already on the list, is this optional expense worthwhile if you're selling your home?

What Does a Home Warranty Offer?

Quite bluntly, a home warranty offers a buyer peace of mind. As a buyer anticipates spending years, and usually decades, paying a monthly mortgage on a home, it's an excellent point of comfort to know that the home will come with a home warranty. The home warranty ensures that repairing or replacing most of the new home's systems and appliances will not become an added expense for a predetermined time. Given that most people have been saving or are spending a lot of money on a move's costs, it is freeing to know that they do not need to also budget for an unexpected repair or replacement cost.

Reassurance also comes from the fact that most home sales do not offer the buyer the opportunity to try out the new home. A walk-through and inspection do not always adequately give the buyer a good understanding of the system's expected life expectancy or appliances. So, as a buyer commits to the loan of tens or hundreds of thousands of dollars, the warranty ensures the new owner will not take occupancy and soon discover the added expense of a new appliance right away.

A warranty can also offer the same benefit to the seller. Once the seller decides to offer a home warranty, coverage can be set up to cover the listing period. That means the seller, too, has the relief of knowing there's a ready solution if anything should break or fail related to the home's systems or appliances. The seller is protected against an additional cost. The repairs or replacements that may have otherwise offset the process can be managed without additional stress. For more information check here

What Does a Home Warranty Suggest?

A warranty not only offers peace of mind. It is a promise to the new buyer that the seller stands behind the systems and appliances' condition. A purchase of a home without a warranty is a gamble. Wise buyers will see a warrantied home for sale as a safeguard against anything failing within the home. Of course, systems do fail. Appliances will break. And, if that should happen on the first day of living in the new home, it is the new owner's responsibility. A warranty suggests to the buyer that the seller is willing to protect against those circumstances.

For the seller, a warranty suggests a solution for any system or appliance failures while the house is on the market. A system breakdown could disrupt a contract. If the seller is forced to make an unexpected repair for several hundred or thousands of dollars, that seller may have to put the sale on hold until they can afford the repair. So, the protection of the systems and appliances during this stage of the transaction suggests an unforeseen expense will not derail the contract.

What Does a Home Warranty Include?

A home warranty will generally include the plumbing, electrical, heating, and sometimes the cooling systems. Most contracts will cover the bulk of the household appliances as well. Typically, warrantied appliances include a refrigerator, stove, oven, garbage disposal, and dishwasher. Further, sellers can customize warranty contracts to cover additional components. Some items that may fall into this category are sump pump, well, septic, built-in microwave, pool, and spa equipment. Each warranty is unique to its vendor and they may not all include the same components.

What Does a Home Warranty Do?

In short, a home warranty offer may be the thing that separates your home from a competing home on the market. It is a selling point. Most buyers will be viewing homes within a predetermined price range with a preferred set of options. The list of candidates will typically result in a narrowed list of options. If all other considerations are equal, a home warranty offers a layer of protection that could earn your home the contract offer.

What Does a Home Warranty Cost?

Costs are primarily associated with where you live. In relation to all the other costs associated with selling your home, the home warranty cost is minimal. Most warranties are available between $300 and $1000. Another couple hundred could offer more comprehensive coverage for properties with extra amenities like a pool or hot tub. When the warranty is purchased as part of the real estate transaction, the cost is often paid out of the proceeds, so as a seller, you won't experience the feeling of buying the plan. Additionally, as the warranty is set up alongside the sale, your agents, lender, or closing representatives will likely take care of all the pertinent details.

Some warranty vendors will offer their contracts to sellers for minimal costs, sometimes even free, hoping that the buyers will continue to use the service after the initial term of the warranty. As a seller in the real estate market, there are many benefits for listing your home with a home warranty. A warranty offers solutions for problems that may pop up for the seller and peace of mind to the buyers. It could be the reassurance that a nervous buyer needs to take the plunge and invest hundreds of thousands of dollars on a home they've never had an opportunity to try out.

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Carlos Diaz
I believe in making the impossible possible because there’s no fun in giving up. Travel, design, fashion and current trends in the field of industrial construction are topics that I enjoy writing about.

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