I have only seen a couple of transactions in the last few years where the buyer did not request a Home Warranty plan to be paid by the seller as part of the offer.I also have not had a seller, so far, that was unwilling to pay for the plan. It is wise for both buyer and seller to have a Home Warranty plan in place. A plan can give the buyer peace of mind and the seller protection. Anyone can purchase a Home Warranty plan. You don’t need to have your home listed to be protected.
I recommend that a seller order a plan at the same time the home is listed. Most companies offer a plan for the seller which covers the duration of the listing or until the house sells. Once the home is sold, the cost of the plan comes out at settlement so there is no out of pocket expense. Also, at closing, the plan is transferred to the buyer for a 12 month period. It is like having 2 plans for the price of one. As I said at the beginning, almost all buyers ask the seller to buy them a Home Warranty plan. The seller is most likely going to pay for a plan anyway so it is wise to be covered during the listing as well for no extra cost.
What exactly is a Home Warranty plan? A Home Warranty plan is like an insurance policy against a break down of a system or appliance in the home. Each Home Warranty Company may have small differences in coverage, cost, and upgrades. Typically though, a standard coverage will cover unknown conditions in the water heater, appliances, faucets, plumbing systems, electrical systems, garage door openers, etc. Upgrades are usually available which may include heating and/or cooling systems, washer/dryers, jetted tub equipment, swimming pools and hot tubs, etc. The cost can also depend on the size of the home, most being standard up to 5,000 sq ft.
How does it work? A seller orders a plan through his/her REALTOR at listing. Three weeks later, the dishwasher suddenly springs a leak, the seller calls the Home Warranty Company and they send a service person out to the home to fix the dishwasher for a small fee of approx. $45-$65. The home gets an acceptable offer the following week and four weeks later, the seller, at settlement, pays for the plan as part of his closing costs. In my experience, it typically costs approx. $245-$350. The buyer moves in and two weeks later, the garbage disposal breaks down. The buyer calls the company and again they send a service person to fix it and charges the buyer the small service fee. The home is covered for 12 from the closing date. Homes with a Home Warranty plan statistically sell faster and for more money while protecting both the buyer and the seller. I purchased a home not too long ago. The seller paid for a standard coverage policy for me and I personally paid for an upgrade for the hot tub that was included with the home. I had never had a hot tub before and decided that was a good idea. It turned out to be a very good move since the hot tub did not work and spending an extra $150 saved me an estimated $1,000. We found several other small problems with appliances which were all fixed for $55 each. I personally am sold on Home Warranty plans.
There are many Home Warranty companies out there and it may be confusing to know which ones are a good value or not. I have access to information that can help you make the best choice. Contact me if you are interested in a Home Warranty plan.