Home Warranties Can Help Home Sellers and Buyers
Home warranties are very useful, whether you are buying or selling
a home. A home warranty policy will pay for the cost of fixing and,
if necessary, replacing many systems including heating, cooling,
electrical, plumbing, water heaters, ovens, refrigerators, etc. The policy
offers coverage against normal damage and is for a set period of time, usually
one year. In some cases ceiling fans, pools and even roofs can be
warranted.
Typically a home warranty will cost between $350 - $600 depending on
terms, conditions and contract period. When you make a claim, there is
usually a small deductible. Home warranties don't cover already damaged items
(pre-existing conditions) and don't cover cosmetic repairs (rust, paint,
etc.). Usually home warranties don't cover structural items such as
window frames, doors, etc. It is important to find out the specific terms
of a home warranty.
Advantages for Sellers
Home warranties can be an excellent marketing tool when selling a home.
Your house can be listed as fully warranted, which means home buyers
don't have to worry about being deceived about the condition of items in
a home. Warranties also differentiate your home from others and may
help in negotiations over the price of the home. Home warranties
typically take effect after closing and last for one year. In a situation
where selling a home in a short time frame is important, home warranties
can make the difference and can even bring a higher price.
Advantages for Buyers
Even if a seller does not pay for a home warranty, a buyer may want to
purchase one. A repair on a major appliance on a house can easily exceed
the cost of a home warranty. Home warranties also give peace of mind in
the period after a purchase. Typically a household's cash reserves are
depleted after purchasing a home and any major repair can be a tremendous
financial burden to the family. A typical repair to a furnace will cost
$1250 - $3500, well above the cost of a home warranty.
Typically an agent or real estate agency can provide you with a home
warranty. As with any contract, read the terms and conditions closely.
In most states, real estate agencies get a monetary incentive for
selling a home warranty. Try shopping around for warranties to make sure
the real estate company is trying to get you the best deal. Home
warranties are very common. It is estimated that nearly one million
policies were sold last year.
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