WHAT IS A HOME WARRANTY AND HOW DOES IT WORK?
WHAT WILL IT DO FOR ME AS A BUYER?
A
home warranty can give a purchaser peace of mind. If anything
catastrophic happens in the house, you are only financially liable for
the deductible. So if the furnace goes out one evening and
you
just can't get it going (as long as it is maintained and not abused)
you would call the warranty company and they would send out a
technician to fix/repair/replace the furnace depending on the problem.
So yes, if the furnace did indeed blow up (heat exchanger)
you
would get a new furnace of comparable quality. You cannot
choose
the technician or company involved but for years my clients have used
these warranties with no problems. You just have to give up a
little control with that extra peace of mind.
What if the house is a disaster? Foreclosure? You can only guess from the home inspection how the systems and appliances were previously treated. In some homes it is completely obvious that they haven't been maintained at all! The particular system or appliance must be in working order as of the closing for the warranty to cover that particular item. So if you purchase a home where the dishwasher is not working or cannot be fully tested, the dishwasher would be excluded.
WHAT WILL IT DO FOR ME AS A SELLER?
It
can offer the
buyer peace of mind and bolster their faith that all the appliances and
systems in the house can be repaired if anything does go wrong.
The nominal deductible seems very reasonable when a service
charge alone is usually double the deductible.
Normally I wouldn't suggest this if you have a new furnace or
this is a newer home. The perfect selling solution for a home
and
a warranty is where the furnace is around 10 years old and all
the
appliances have been well maintained and cared for but varied ages.
As a seller, your home would be covered as of the listing day thru the closing day. Then the warranty would transfer on to the buyer at closing and then continue for that full year. The warranty is paid for at the closing.
Currently these two companies are RE/MAX Benefits Partners which lets me offer you a reduced price on warranty policies given thru my company for listing or buying a home thru me. Depending on the sized home and features covered this can be up to a $750 value.
Possible Savings: AC or Heating System $1250 to $5000
Washer or Dryer $200 to $1000
Stove $500 to $1400
Refrigerator $600 to $1200
Water Heater $375 to $800
Home Component Life Expectancy Article
A home warranty
is a service contract, normally for one year, which helps protect home
owners/home buyers against the cost of unexpected covered
repairs or replacement on their major systems and appliances that break
down due to normal wear and tear.
Coverage is for systems and
appliances in good working order at the start of the contract.
Check each home warranty policy from each company to see which of the
following items are covered and which company you prefer.
Also
find out if the policy covers the full replacement cost of an item.
- Plumbing
- Electrical systems
- Furnace
- Water heater
- Heating ducts
- Water pump
- Dishwasher
- Garbage disposal
- Stove/cooktop/ovens
- Microwave
- Refrigerator
- Washer/dryer
- Swimming pool (may be optional)
Deductibles are
usually $55 - $75 - $100 depending on what plan you select for
'EACH' occurance.
HERE ARE TWO RELIABLE COMPANIES THAT OFFER POPULAR PLANS FOR YOU TO CHOOSE.
Show me what Home Warranty of America Offers
Lyn Sims (847)230-7324 at RE/MAX Suburban
I proudly serve and sell
real estate in the Northwest
Suburbs of Chicago.
If you are
thinking about purchasing
or selling your home in the communities of Elk
Grove Village, Schaumburg, Hoffman Estates, Roselle, Palatine, Medinah,
Itasca, Bloomingdale, Carol Stream,
Bartlett, Hanover Park, Streamwood, Elgin, South Elgin, St. Charles and
more importantly, want to work with a local area expert, contact me
immediately.
Buyers - Great Step for peace of mind©2008 Lyn Sims - RealEstateConsumerInfo.com
© 2010 Lyn Sims
Lyn, a service contract is valuable on a pre-owned home no matter who pays for it and your listing of the systems covered shows the great protection available for the new resident. Great post!!
It's a great way to add peace of mind! Thanks Gary.
We strongly recommend the buyer to ask for a warranty if not provided but encourage our sellers to offer one and be covered through the listing period. In our area we strongly recommend American Home Shield Warranty. We get many cards from AHS showing us when a client has utilized their service (good chance to make contact with client) and how much was spent.
Dorie: At first I was going to delete your comment rather than turn the post into a 'I use this and that advertising post'. Instead I've decided to leave it because there are at least 5 companies to choose from in my area that are reputable. They are not RE/MAX affiliated and do not give us a volume discount as those companies mentioned above. That gives a better value for the consumer. They also have 13 month plans available which some companies do not offer. Thanks for your comment.