Right now, in this strong Seller’s Market, you won’t see too many Sellers offering a Home Warranty to potential Buyers. But in times when there is more inventory of homes and things are more competitive for Sellers, it can help set their home apart — and reassure Buyers about a home that’s more than a few years old.
Assurance for Buyers…and Sellers
After all, Home Warranties cover many appliances and systems of a home and are therefore great to have if you’re worried about something breaking down. So it’s not a bad thing for Sellers to consider offering, even now, especially if appliances and systems like an HVAC unit or hot water heater hasn’t been recently replaced and is no longer covered by a manufacturer’s warranty. In fact, Sellers can even sign up for what’s called a Seller’s Plan to cover them during the listing period and through to Settlement. Then, if an appliance were to malfunction during that time period, the Seller would be covered, saving them money from costly repair or replacement when they’re getting ready to sell the home. (Imagine the frustration of having your dishwasher break down a couple weeks after listing your home!) On the day of Settlement, this Seller’s Plan can be converted to a Buyer’s Plan to cover the new owner for a year.
Who pays for a Home Warranty really depends on market factors and the negotiating skills of your Realtor. Again, right now Buyers and their agents don’t have a lot of negotiating power and are even opting for “Void Only” inspections just to make their offer more attractive versus other offers. (A “Void Only” inspection allows the Buyer to void the contract if they find something that is displeasing to them during the inspection, but they can’t submit a list of repair requests to the Seller.) This is all the more reason — if the home is older and without updated appliances and systems — for a Buyer to talk to their Realtor about asking the Seller to consider paying for a Home Warranty. It’s a relatively small cash outlay — and again, can also protect the Seller from the beginning of the Listing Period through to Settlement.
If a Seller refuses to pay, a Buyer would be well advised to consider buying a Home Warranty on their own. Again, it’s peace of mind as a new homeowner. The last thing you want to be dealing with is costly repairs soon after moving into a home.
What Type of Home Warranty is Best?
There are many Home Warranty companies out there, and some are certainly better than others. You’ll want one that has five-star technicians who know what they’re doing — and who actually fix problems as opposed to taking a “band-aid” approach. When things can’t be properly fixed, you want a company that will pay for replacement. Some companies even offer “Maintenance” services like window cleaning, lock re-keying, carpet cleaning, and pest control for a small co-pay.
Whether a Seller or Buyer pays for a Home Warranty, it can be paid for at Closing.
Reach out to us if you have any questions about companies we recommend — or Home Warranties in general.