Home Warranty Do You Need It At Sale Or Not?
Appliances will break down at some point. If you don’t want to pay for costly repairs, you invest in a home warranty plan. But as a home seller, do you need a plan when trying to sell you home?
Home warranties are like an insurance policy. You pay them up and when you need them, if you need them, they are in place to help you out. A home maintenance plan is good for people who are not handy around the house and wouldn’t know who to call if repairs were needed.
Home warranties usually cover appliances and systems installed in the house that are subject to a warranty. The owner of the home pays a small fee to the professional who comes to fix the problem, but the rest of the cost is handled by the warranty company. They will pay what is covered by your plan to the professional.
Home buyers can negotiate with a seller to see who pays for the home warranty. You do not need to have a home warranty when selling the home unless you want to ease the buyer’s mind after the sale. It can be a bargaining chip. If a buyer is not quite offering what you want for the house, you can counter with an offer to pay for a year’s contract with a warranty company in exchange for settling on the asking price.
Now, it may not be that easy, but a home warranty is something that a new home owner needs in a pinch. Anything can happen and you might not have $600 just lying around to buy a new part for the furnace. Negotiating a home warranty deliverable at time of sale ensures that the home appliances and such will be covered from day one.
A home warranty plan may run to around $400 a year. Upgrades to the plan will cost you more. The plan does not cover outdoor items, faucets, or pools. If you offer to purchase a plan for the new owners, be sure that it covers refrigerators, washers, and dryers. We use these appliances as much as any of the others but not all plans cover them. In good faith, provide the new owners with a suitable plan that will cover all of their needs.
If the seller already has a home warranty, they can terminate it in favor of a new plan for the new owners. Be sure to check with the home warranty company first to find out what you should do when a policy is already in force for a residence.
The decision is up to you whether or not you want to provide a home warranty or let the buyer choose their own plan. You can still offer to pay for a one year plan when they decide on a policy.
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