Selling a house can be a long and challenging process. With many accompanying fees and headaches, the last thing you want is to get caught paying for repairs and replacements before the house is sold. If you are selling a house, a home warranty has you protected.
Do You Need a Home Warranty If You Have Homeowners Insurance?
The short answer is yes. There are significant differences between these two. Homeowners insurance covers damages and repairs that result from accidents, fires, or natural disasters. A seller’s home warranty, on the other hand, is a specific contract that protects the seller from paying costly repair and replacement fees. If a home system or major appliance breaks down before the deal closes, the warranty provider handles the repairs and the bulk of the cost.
What Does a Home Warranty Cover?
While coverage will vary from contract to contract, seller’s warranties generally cover significant home systems and appliances. These include electrical, plumbing, heating, and cooling systems and major appliances, such as the dishwasher, stove, water heater, garbage disposal, and built-in microwave. More extensive coverage options generally include the refrigerator, washer, dryer, and garage door. Some may even cover hot tubs, pools, and septic systems.
Most seller’s warranties cost $300-$550 a year. This seems like a lot of money upfront. However, it pales in comparison to costly repairs. A new septic tank alone could cost you up to $2,000. Coverage varies, so be sure to ask what is covered and what is not. Be specific and make sure to read the fine print. Coverage options also vary depending on your state of residence.
Does a Home Warranty Help Sell Your Home?
Two-thirds of all home warranties are purchased in conjunction with the sale of a home. It is a huge benefit when selling your home. When listing a home, the seller agrees to maintain the property “as is.” A home warranty ensures this is the case. The knowledge that large, costly repairs are covered also incentivizes potential buyers to close the sale. The buyer wants the home systems in working order just as much as you.
How Does a Home Warranty Work?
Imagine you are selling your home, and just before you close the deal, your home’s water heater breaks down. If you have a seller’s warranty, you simply file a claim instead of paying the full cost of the repair. The warranty company will contact the appropriate service provider, and they, in turn, contact you. Depending on your contract, you may have to pay a small $75-$100 trade fee. The warranty company then pays for the repair or replacement of the water heater with no further cost to you.
Is a Home Warranty Right for You?
Some purchase this coverage and never have to use it. You may even choose to forgo this coverage if your house and appliances are new. Maybe you think it could not happen to you. However, accidents happen. It is an unavoidable fact of life. If you are dissuaded by the price tag of a home warranty, imagine your potential dismay at having to pay for repairs that dwarf the cost of a warranty fee.
Home warranties not only protect you from costly repairs but also provide peace of mind. If you are the kind of person who loses sleep, wondering how you will pay for unforeseen expenses, then getting a home warranty is the choice for you.
How to Choose the Right Home Warranty ?
Many companies provide this service. With all of them boasting great features at the lowest cost, it can be difficult to know where to start. Look at your needs and discern what works best for you.
Choice Home Warranty, for example, offers several features. These include free cancellation within 30 days, reserving failed repairs at no cost to you, and not denying coverage for old appliances. Another example, Select Home Warranty, offers a wide range of coverage options and free roof leak coverage.
Certain companies also may give special discounts. You will not know until you ask. Be sure to shop around. Call several places and compare quotes. Ask about your specific circumstances. No one size fits all plan exists, so make sure you get the best coverage for your specific home.
A home warranty may seem extraneous at first, but it is absolutely a worthwhile investment. It protects you from unforeseen repairs, adds value to your home, and provides invaluable peace of mind. Do your research when finding a plan, and with some time and common sense, you are sure to find a plan in your price range that suits your specific needs.
