Selling a home can be an intense experience. It is simultaneously one of the most exciting and stressful things we can do as there are a lot of moving parts and major decisions to make. Thus, it’s not surprising that we want to be careful but also confident in our choices.
Before selling, offering to purchase a home warranty to the new owner can encourage the buyer to close the deal. As you learn more about how a warranty works and how it can benefit you as a seller, you will see why it’s a popular incentive.
An Overview of a Home Warranty
When you purchase a brand-new home, the builder will include a one or multi-year warranty on various elements of the house. But if you buy an older home, you will need to purchase a home warranty if you want to avoid paying for expensive repairs or replacement costs.
Unlike homeowner’s insurance, a home warranty plan is not required. Insurance policies cover household items that suffer damage or are destroyed due to a catastrophe or disaster. A home warranty will fix or replace these items due to normal wear and tear or unexpected issues that cause them to stop working properly.
A home warranty is an agreement between you and a service provider. You agree to pay a monthly or annual fee, and the company agrees to service appliances and systems in your home when they break down. The warranty will last one year, but you can renew it when it expires. Home warranties typically cost around $500 a year, though some are less or more.
When to Purchase It
There is not a bad time to buy a home warranty plan. Many homeowners make the purchase at the time of closing on their home. Other people may do so after buying new appliances. It is also common to buy a new plan after the previous one has expired. It may also make sense to purchase a warranty at the time of selling your home so it is in place for the new owners.
Pros of a Home Warranty Plan
A home warranty can provide you with peace of mind when expensive appliances or systems stop working. The warranty covers everything from the refrigerator, stove, oven, dishwasher, microwave, water heater, and washer and dryer to your sprinkling system, plumbing, HVAC, and roof.
Repairing or replacing these conveniences can put a damper on any budget. With a warranty, you will pay for the warranty along with any service call costs. Then, a technician will take care of the problem at no additional cost to you. This can save you hundreds or even thousands of dollars, depending on the item and the issue. A warranty keeps you from having to fix the problem yourself. This can be welcome news if you are not a handy person or lack the time to tackle the issue.
Sell Your Home Faster
Offering a home warranty with the sale of your home can be attractive to prospective buyers. Buyers like having this protection against unforeseen problems. If buyers are deciding between your home and another one and everything else is equal, the warranty could be the deciding factor. Also, your home is less likely to stay on the market for a long time if it has a warranty than if it does not.
Sell Your Home for More
It’s also possible that you could justify listing the home for a higher asking price if it includes a warranty. Potential buyers may be more willing to pay a few thousand more for a house over the next 15 to 30 years and not have to worry about major repairs for the next 12 months than buy a home for less with no such protection. This can help significantly if you are trying to cash in on as much equity as possible to go toward your new purchase.
Bring More Buyers into the Equation
By offering a home warranty when selling your house, you may garner even more interest in your property. A buyer who would otherwise shy away from an older home may be more willing to submit an offer when you have home warranty coverage.
A home warranty can benefit you as a homeowner and as a seller. If you are listing your home, consider buying one. It can help you sell your home faster and for the price you want. It gives you and potential buyers peace of mind during what can be a stressful process.