Selling

What to know about buying a Home Seller Warranty

Having a warranty in place can protect your financial interests while you’re in the process of selling your current property.

If you’ve ever sold a home before, you’re probably already aware of how long the process can take. Even after you’ve accepted an offer on the home, there is a lengthy process filled with inspections, appraisals, waiting periods and paperwork processing that can take months in some cases. What’s even more frustrating than the period of waiting is the fact that things can happen to completely derail the deal between the day you accept the offer and the day your sell officially closes.

What many people don’t consider is the fact that major home systems can breakdown while a home is on the market or after an offer has been accepted. Having a warranty in place can protect your financial interests while you’re in the process of selling your current property.

What Is a Seller’s Home Warranty?

A seller’s home warranty is a program that covers the cost of repairs or replacements in the event that one of the major systems or appliances in your home breaks down. Obviously, if you’re selling your home, you don’t want to spend thousands of dollars replacing a major home system before you move out and call a new address home. A seller’s warranty ensures that you’re covered.

Benefits of a Seller’s Home Warranty

Hypothetically speaking, let’s say that you’ve accepted an offer on your home. After months on the market, a buyer finally came along and has made an offer that you simply can’t pass up. However, their offer is contingent on your home passing an inspection. Somewhere between the date that you signed the paperwork to accept the offer and the day of the inspection, your water heater decided to stop working. Obviously, the inspector is going to make sure that the home has hot water as a part of his or her inspection, so you’re going to have to get the problem fixed sooner than later.

According to Home Advisor, the average price of a traditional water heater can be up to $1,600. Shockingly, it can cost another $600 to have the new water heater installed, so now you’re out $2,200 if you want your home to pass inspection. A seller’s home warranty that includes protection for your water heater and plumbing system would cover the cost of replacing your water heater.

It’s also worth noting that buyers are more apt to put in an offer on a home that has a seller’s warranty in place. Buyers don’t want to have to worry about the possibility of something as serious as an HVAC system breakdown taking place between the day they make an offer on your home and the day the deal closes. Since HVAC installations can cost upwards of $8,000 in many cases, your warranty can provide peace of mind for you and the person who buyers your home.

How Do I Get a Seller’s Home Warranty?

There are also multiple answers to this question. As a home seller, you’re certainly within your rights to purchase a seller’s home warranty on your own. Generally, these warranties cost somewhere between $300 and $500 and there are dozens of companies that offer them. You may have some trepidation about spending $500 on something you may never have to use, but the benefits of these warranties far outweigh the risks.

It’s also not uncommon for real estate agents to offer to purchase a seller’s home warranty on behalf of their clients. If you have a Realtor who is willing to do so, it’s not uncommon for them to pay the cost of the warranty on the front end and then tag reimbursement for it onto their commission once your home sells.

When Should I Buy a Seller’s Home Warranty?

Depending on how fast the real estate market in your area moves, it may be a good idea to get warranty protection in place the day that your home officially goes on the market. Since it provides your Realtor with another advertising tool, they can start publicizing the fact that the systems in your home are covered by a warranty.

If you don’t want to spring for a warranty that early in the process because it takes a while to get an offer in your market, that’s understandable. However, it’s a good idea to get one in place the day that you accept an offer on your house.

No matter when you purchase a warranty during the process of selling your home, they’re a wise investment. They become even more beneficial if you have systems in your house that are no longer covered under a manufacturer’s warranty.

Home seller’s warranties are a wonderful tool that can help protect you against the breakdowns that all home systems are prone to experience. A relatively small investment can help ensure that you’re not responsible for major system replacement and that you don’t lose the potential sell of your home.

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