Choosing a home warranty
Whether you are buying or selling a home I strongly recommend you consider purchasing a home warranty.
A home warranty is a form of insurance policy that covers certain parts of your home and systems.
Although each home warranty varies in cost, coverage and options it generally is in place to cover larger items needing replacement in the event of repair or replacement needing to be done.
I’ve always recommended to my sellers to put this in place in advance when they list the home to get the added benefit of sellers coverage.
For many years home warranty companies were able to compensate real estate brokerages with cash for referring them business, directing clients to use them. This practice changed when HUD stepped in and said this practice is a violation. Even today however some real estate agents and brokerages on occasion are in a relationship with home warranty companies for “favors” to make them the preferred home warranty company.
The savvy buyer should be asking for more than one referral and as with all referrals you receive from ANY source, you should ask WHY they are referring them.
Get 3 home warranty agreements that outline coverage, yes that’s lots of small print, and read all that small print to know what exactly is covered.
In my years in the business I have seen many instances of home warranty misinformation.
Home warranty comes out and finds the furnace needs to be replaced and tells the home owner that the new furnace will cost $3500.00, the seller is upset because they thought the furnace was covered 100%.
The home owner buys coverage to protect them in the future, when the refrigerator stops working and the warranty company arrives, the home owner pays a $100 deductible and is later told the ice and water dispenser are NOT covered items on the policy.
Your real estate agents “friend” the home warranty person is not going to be able to help you, so it behoves you to make the selection based on the facts to get what’s best for you.
At the time of creating a relationship with a buyer My personal policy is to provide 3 home warranty packets for them to review so they are informed and aware BEFORE we write a contract. That way when the time comes we know what home warranty fits the buyers needs.
Know you specific coverages, it can save you thousands of dollars later on.