Home Warranty Awareness Cost More Than You Realize
A home warranty plan, also known as a home protection plan, is a service contract that offers homeowners in Oakland County, Mi. a way to safeguard themselves against possible breakage or a malfunction within the home. It’s impossible to predict the future, which is why so many buyers look for that little extra peace of mind to comfort them when life unexpectedly throws them an unforeseen problem.
As a Realtor it is sometimes left to you to decide the home warranty that you want the home seller to provide for your buyer. In some cases it is important that you do your homework to determine all of the items that may need coverage such as swimming pool, garage door opener, plumbing and especially the water softener if it is owned by the seller.
The best way to make sure that you negotiate what is covered and what is not is to pay close attention to the private inspection is for you and the home buyer to make sure you attend the private inspection and ask the inspector to note the items like things such as garage door openers and water softeners their age and conditions. In cases of water softeners, as the buyer’s agent you need to ask questions of the seller’s agent to determine if they are owned by the seller or if they are not. If the home owner owns the system then you need to include it in the home warranty.
As you attend you home buyers private inspection make notes an suggest items they may want the home seller to include in the home warranty as this could mean thousands of dollars In repair cost and could also cost you as a Realtor a referral from the new home buyer.
Typically, home warranties cover the repair or replacement of a home’s heating, plumbing, and electrical systems and major built-in appliances. The cost often runs $350-$450, typically with a small deductible for each repair or replacement.
Shop For The Best Coverage
When shopping for home warranty coverage, compare the following:
• Required pre-warranty inspections.
• Coverage for appliances and systems.
• Deductibles and service fees.
• Dollar caps on total or individual replacement/repair costs.
• Limits on number of repair calls.
• Costs, including any initial or inspection charges
Who Needs a Home Warranty Plan?
Basically, anyone who purchases a home and is concerned with the cost of repairs should consider a home warranty plan. This is especially true of first-time home buyers who may not be familiar with home maintenance.
Factoring In the Cost
When factoring in the potential cost of repairing a major appliance or other home component, a home warranty plan may not be a bad investment. The actual cost of warranty coverage will depend on the plan chosen and the items protected. As is the case with everything in life, it’s best to shop around and compare prices.
Who Pays For a Home Warranty Plan?
As a buyer, you can order a home warranty plan in conjunction with the purchase of your home. However, some sellers or builders may include this type of offering as an incentive to attract potential buyers. In this case, the plan is yours at no additional cost. Some Realtor’s may also offer a home warranty plan as a house warming gift to customers who buy a home through their agency.
What’s Covered & What’s Not
Just like a car warranty, no two policies are the same. Coverage varies by location and issuer, and your Realtor can help you to choose a warranty plan that best suits your needs. Most basic plans cover a home’s heating and cooling system, electrical system, plumbing, water heater and major appliances, including a dishwasher, range/oven/cooktop, garbage disposal, etc. Coverage does not apply to items that are misused or damaged, either intentionally or through negligence. Instead, most home warranty plans are designed to protect the homeowner from defects that result during the course of normal wear and tear.
When considering the purchase of a home warranty plan, review the complete contract and familiarize yourself with exactly what’s covered under your policy. If you want an upgraded policy, don’t hesitate to ask your Realtor if one is available. Most companies do not require a home inspection and will notify homeowners when their coverage is about to expire. The good news is that most policies are renewable and I always suggest the home buyer to renew after one year.
What to Do If a Problem Arises
If you are unable to satisfactorily resolve an issue with your home warranty plan, either due to denial of a claim or undesirable service, talk to the Realtor who sold you the home. If he/she refers a lot of business to this particular company, it may be possible for him/her to speak with them about reaching an amicable resolution.
The purchase of a home is a big step and it’s likely to be the largest purchase you will ever make, so be sure to consider all of the options available to help protect yourself from costly repairs. Ask your Realtor for more information relating to available home warranty plans.
Types of Home Warranties
1)Homeowner Warranty: Available to homeowners who are not listing their home for sale or who purchased their home more than 90 days before applying for the warranty. Sometimes these warranties are not in effect until 30 days after they’re purchased.
2)Buyer Conversion Warranty: A home warranty that has been transferred to the buyer that is immediately effective on the day of the closing.
3)Renewal Warranty Contract: A home warranty policy that has been renewed. Most home warranties are effective for one year and are renewable.
4)Seller Home Warranty: A home warranty purchased by a home seller during the time the property is listed. The warranty becomes effective as soon as it’s paid for and covers the property during the listing and a home warranty placed on the home by a prospective home seller at any time during a listing. This plan can be transferred to the buyer at the closing.
5)Buyer Direct Warranty: A home warranty purchased by the buyer or by the buyer’s real estate agent that becomes effective on the day of the closing. The buyer can purchase this type of warranty within 90 days after a closing.