Who Benefits from Purchasing a Home Warranty: Buyers or Sellers?

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If you’re looking to sell your house, you may consider buying a home warranty before you put your house on the market. A home warranty can provide valuable peace of mind for both the buyer and seller, making the process smoother and more efficient. However, a home warranty can also hinder your sale process, so it’s essential to understand its value before signing on the dotted line.

Value of a home warranty

If you’re buying a house, you might find the seller offering a home warranty as a part of the deal. It can be an excellent incentive for buyers as a warranty will protect expensive systems and appliances. In addition, many buyers find home warranties more desirable than the seller’s option. Sellers can also offer a home warranty through their real estate agent. While home warranties can be valuable to buyers, it’s essential to know the difference between the two types of coverage.

Although a seller usually pays for the home warranty, the buyer will only pay if the contract is used. Often, buyers opt to purchasing a home warranty in Ohio before closing the deal because they are unsure of the condition of their new home. A home warranty can also protect buyers from unexpected repairs after they move in, preventing significant out-of-pocket expenses.

Buying a home warranty

While Purchasing a home warranty coverage is not mandatory, it can be valuable to a buyer’s purchase. It can cover broken things while the home is on the market or before a buyer takes possession. Although some home warranty companies offer free policies to sellers, most sellers opt to purchase them for their buyers. These warranties help smoothen the sale process and prevent disputes in the future. Home warranty policies typically cover some core systems and appliances but may not be as comprehensive as a buyer’s warranty.

While a home warranty may not be required by law, it is an effective negotiation tool for sellers and buyers. A home warranty can be a compelling incentive to sell a home when combined with other benefits. In a seller’s market, a home warranty offer is incredibly persuasive. If a buyer is unwilling to make a final purchase decision, a home warranty offer is one of the most effective negotiating tools.

Buying a home warranty in a seller’s market

A seller’s home warranty can help you protect your investment. These plans typically cover major home systems and appliances. The buyer pays a minimal service fee, and the seller covers the remaining portion of the warranty upon closing. These plans can prove valuable in a seller’s market because they protect the seller’s finances during an upcoming finale. Plus, many warranties cover the same items that the seller covers. So, in addition to providing protection, a home warranty also gives you peace of mind.

You may be tempted to skip the home inspection when selling a home. But a home warranty can help protect you and your buyers in the long run. These policies are tax deductible and defend you after the sale, which is a bonus. A home warranty policy is also an excellent negotiation tool. A warranty on your home can reduce the time you spend repairing it after you sell it. Consider negotiating a discount on your policy if you’re selling a home.

Canceling a home warranty

While buying a home warranty can be an excellent investment, there are pitfalls to avoid when choosing a company. When purchasing a home warranty, always read the policy carefully to understand what it covers and what exceptions exist. It can help you decide if you need the procedure and if you should cancel it after the purchase. 

A home warranty has a yearly premium ranging from a few hundred to several thousand dollars. The seller may partially cover the premium, but not always. In addition, home warranty companies often charge a service fee or copay for repairs and other services. Check your policy and contact customer service.

Selling a home with a home warranty.

A home warranty is a popular selling point for sellers. A buyer may be more interested in buying a home with a warranty than one without. A home warranty shows that the seller cares about their home, and many policies can be transferred to a new owner without any waiting period. In addition, the benefits of a home warranty may help close the real estate deal faster. 

One significant benefit of a home warranty is the protection it offers. The warranty provides coverage during the listing period, which may protect the seller and buyer from unexpected expenses. Additionally, some companies offer free coverage for the first year for the seller, hoping that the buyer will continue the plan after purchasing it. This is particularly beneficial for older homes since a buyer may be unable to afford to continue the warranty after purchase.

 

By kevin bing

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