Should You Offer a
Home Warranty?
A home warranty
can protect both home sellers and buyers. Typically, a home warranty
covers repair and replacement costs when appliances and systems in your
home such as plumbing and heating and cooling units quit working properly.
Home warranties vary widely from company to company, so ask your realtor
for information on several and read them carefully. Generally they are for
a period of one year and often can be renewed by the buyer. (The renewal
cost may not be the same as the cost of the original policy). Some may not
protect you as the seller - not paying for your repair bill if your
refrigerator quits working before closing, for instance, but would protect
the buyer by paying for their repair bill or replacement costs if the
refrigerator fails after closing. Others may protect you as the seller for
some items under certain conditions. Some may cover the roof of your home,
and often you can get additional coverage for the septic systems or
private wells at additional cost.
If your appliances or plumbing or heating systems are dated, you might
consider offering a home warranty. Much as a warranty offered by the
builder on a new home can reassure buyers, a home warranty can do the same
for potential buyers for your home. Offering a home warranty as part of
your marketing package may make your home more attractive to potential
buyers than would a home without a home warranty.
In making the decision whether or not to offer a home warranty, you might
want to weigh the expense of a home warranty (at the time of this writing,
generally about $350 - $450) against the cost to repair or replace an
appliance or system if the buyer comes after you later, feeling you did
not properly disclose a defective appliance or system.
Finally, although you may purchase and offer a home warranty, a buyer can
request a home warranty even if one is not offered. There are no rules as
to who pays for the warranty – a buyer could request and pay for their
own.
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copyright ©
Michael Feicco 2006
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