Having a home warranty is important not only for buyers, but for sellers as well. If you are buying or selling a home, you may regret not investing a relatively small amount of money to have one. In this post, we will explain what home warranties do and why you should get one.

THE PURPOSE OF A HOME WARRANTY

A home warranty covers you in the event appliances or major systems break down. In most cases, a warranty will cover things that your typical home owners insurance policy does not. Having both a comprehensive home owner's insurance policy and a home warranty will provide you will excellent coverage.

Most homes experience issues pertaining to mechanical systems and appliances on a regular basis. It could be once a year or every few years, you just never know when something will happen. That is why having the protection of a home warranty is a smart thing to do for both buyers and sellers.

FOR BUYERS

1. CONVENIENCE  - When covered by a warranty, you will have access to qualified contractors simply by calling an 800 #. This is especially nice if you are new to the area.

2. LONG-TERM PROTECTION - While a seller will typically pay for the first year of a buyer's home warranty, the buyer has the option of renewing every year. As your home ages, the likelihood of a problem increases. So for the long term, having a warranty can be a huge help.

3. PEACE OF MIND - There is a tremendous feeling of knowing you will be covered if certain problems arise.

FOR SELLERS

1. COVERAGE WHILE ON THE MARKET - You will get covered during the listing period and NOT have to pay for the policy until closing.

2. STAND OUT FROM COMPETITION - Offering a home warranty may entice a buyer to purchase your home over another that is not offering one.

3. ELIMINATES PROBLEMS AFTER CLOSING - If a problem arises after title transfer, it is better for the buyer to contact the warranty company instead of you.

DO I REALLY NEED ONE?

We are not here to tell you what to do. But based on the chart above, claims are certainly a common occurrence. In fact, we get emailed every time one of our clients has a claim paid by the warranty company, and it seems like it happens all the time. From an agent's perspective, I do feel it provides tremendous value to both buyers and sellers.

When it comes to buying or selling a home that costs hundreds of thousands of dollars, spending $400-500 on a home warranty seems pretty minimal. If you think of a warranty as more of an investment than an expense, it will hopefully make  more sense.