Selling your home requires a lot of decisions, one of which is whether to include the home warranty as part of the transaction. Although not necessary, this added layer of protection can alleviate buyers’ concerns, help the list stand out, and even make the closure process smoother.
However, before you commit, it is worth understanding exactly what the home warranty does and whether providing it is the right move for your situation. So, if you’re planning on selling your home in Austin, Atlanta, or anywhere in between, there are things you should know before deciding to include warranty on your list.
What is the seller’s home warranty?
A home warranty is a service agreement that covers the repair or replacement of major systems and electrical appliances within the home. Unlike homeowner insurance, which protects against fires, weather damage, and more, home guarantees usually intervene when something breaks due to wear or tear. Think of an air conditioner, plumbing, kitchen appliances, or a water heater.
How much does a home warranty cost?
Although plans are different, most home seller guarantees last for a year and offer a range of different tiers. Costs often range from hundreds to just over $1,000, depending on provider and coverage level. With a home warranty, most businesses charge a service fee for each repair request. This fee usually ranges from $75-50 per visit, depending on your provider and specific plan.
Beyond the service charge, the warranty covers the remaining costs of repairs or replacements up to the limits of your policy
Does a home warranty protect buyers or sellers?
Home Warranties are primarily designed to protect buyers rather than sellers. Once the home sale is over, warranty coverage will be transferred to the new homeowner. This gives buyers the peace of mind that if something breaks shortly after the move, they won’t face the complete financial burden of unexpected repairs.
That said, there are also some protections for the seller. Warranties can help cover costs, such as in the event of a major system breakdown before closing, reducing the likelihood of last-minute negotiations and sales delays. Additionally, it minimizes the seller’s chances of disputes. If something breaks right after the buyer moves, the warranty gives a clear path to fixing it without returning to the seller with complaints or legal concerns.
Why do sellers offer home warranty?
Providing a seller’s home guarantee can be a strategic move when selling. It shows the buyer that you are standing behind the condition of your home and can also protect you from potential post-sale disputes if something breaks right after closing.
Some sellers may even buy home guarantees while their property is still listed, and will give compensation while they are on the market. This means that if HVAC goes out before the sale is final, it can be covered. Once the home is sold, the warranty will be transferred to the buyer for one year.
How Home Warranty Helps You Sell
There are hurdles to selling a house. Buyers are often nervous about hidden issues or common home inspection issues. Even if your home is well cared for, you may be asking questions about the age of plumbing and electrical appliances. The home warranty adds a level of security.
In a competitive market, offering home guarantees can lead to an advantage in your property, especially by providing peace of mind for first-time buyers. If something breaks before closing, it will protect you and act as a valuable negotiation tool once the offer is accepted.
Understanding standard home warranty coverage and add-ons
Coverage varies depending on the provider and plan you choose, but most home warranty falls into two categories: standard coverage and optional add-ons.
Usually included in standard coverage
Most master plans cover critical systems and key appliances. This often involves:
Heating and Cooling Systems Electrical Systems Piping Systems Kitchen appliances such as water heaters, stoves, ovens, dishwasher washing machines, etc., can be used to include microwaves and trash waste with built-in washing machines and hair dryers.
These are items that tend to be used daily and can cost you to repair or replace. Standard warranty is designed to reduce the financial burden if something fails in the first year after sale.
Optional add-ons that can be included
Depending on the functionality of your home, we recommend upgrading coverage to include additional items. These are often available as optional add-ons.
Roof leak protection for pool and span purification systems additional refrigeration units (such as wine refrigerators and second freezers) well pump central vacuum system smart home components or electronics (some new providers offer)
If you are selling a home with features like a pool or guest house, adding additional coverage can make your list even more appealing. Please note that add-ons cost an additional cost and may require inspections before they are included in the policy.
What are not included in the home warranty?
Seller’s home warranty protects against unexpected breakdowns, but do not cover everything. Usually excluded.
Routine Maintenance: Tasks such as filter changes, HVAC services, gutter cleaning, and more. Existing problems: issues that existed before compensation began. Structural and cosmetic damage: foundation, roof structure, paint, floor. Code Upgrades and Permissions: Repairs required to meet current building standards. Excluded systems: Specialized items such as pools, septic tanks, smart home devices, and more, unless added separately.
How does home warranty differ from homeowners’ insurance?
It’s easy to confuse home insurance and homeowner insurance, but it covers very different things.
The house warranty is covered
Home warranty helps cover the costs of repairs or replacement of electrical appliances and systems that have failed due to regular use. This may also include HVAC, plumbing, electrical systems, refrigerators, or garage door openers. It is designed to reduce the financial burden when something stops working after years of wear.
What homeowner insurance protects
Homeowner insurance protects you from unexpected events and major losses. If your home is damaged during a fire, storm, or intrusion, insurance can help cover the costs of repairs or reconstruction. We also provide personal property protection and liability compensation in case someone gets injured in your property.
One handles repairs and the other handles risks
In short, home warranty can help with everyday breakdowns. Insurance is being introduced during emergencies and disasters. They serve a variety of purposes, one does not replace the other.
Why do you need both?
Buyers often feel safer if they know that both have protection in place. Insurance protects your home financially from major losses, but the warranty helps you deal with daily repair issues without any extra stress. When paired, these two tools provide peace of mind in all respects.
>>Read: Family Guarantee vs. Family Insurance
Disadvantages of home guarantee
Home warranty can provide protection and peace of mind, but they are not magical modifications. There may be coverage restrictions, exclusions, or service delays. Some buyers may prefer price reductions over warranty. In rare cases, negative experiences with guarantor companies can be inadequately reflected to you after sale.
If you are not sure, talk to a real estate agent. They will know what your local buyers are expecting and whether the warranty could make a difference in your sales. Finally, using a home maintenance checklist will help you maintain unexpected repair additions.
FAQ: Is the Home Warranty suitable for your sales?
Is it worth the cost?
Sellers can often find home guarantees worthwhile, especially in homes with older systems or appliances, to attract offers or make them closer faster. Guarantee reduces buyer anxiety and potential sales issues. It’s not very clear in new homes, but agents recommend them by default. Especially in the cooler market that requires buyer incentives.
What is a limited seller’s home warranty?
Limited Seller’s Home Guarantee is a kind of guarantee that covers the home while listing until closing while listed for sale. It is designed to protect the seller from unexpected repair costs if the system or appliance covered before the home is sold. Once the sale is complete, coverage is usually transferred to the buyer for the remainder of the period.
Is the existing home warranty transferable?
Yes, most home guarantees can be transferred from the seller to the buyer upon closing. Although in many cases, the guarantor will handle this automatically, we recommend checking with your provider to ensure that the buyer knows how to activate or manage coverage after sale.
How can a seller purchase a home warranty?
Sellers can purchase home warranty through major warranty providers. Many real estate agents prefer the companies they work for and help them coordinate the process. Typically you can choose which coverage you want to start immediately or which coverage your home will be active while you are signing up. Cost and coverage options vary, which can help you compare several different providers.
Should I provide a home warranty in the buyer or seller’s market?
In the buyer’s market, offering home guarantees can make your home more attractive to discreet or budget-conscious buyers. It shows you are offering added value and peace of mind. In a seller’s market where demand is already high, you may not need a guarantee, but if your home has old systems or appliances, your listings will stand out or help ease buyers’ concerns.
>>Read: What is the buyer’s market and the seller’s market?
Do buyers actually care about home warranty?
Yes, many do, especially first-time home buyers, or shoppers on the top of their budget. Knowing they are not on the hook for expensive repairs right after they move can be a big selling point. If you include warranty, please come ahead with details and choose a reputable company with a good customer service rating.
