A Home Warranty is a little used but very effective tool in a real estate transaction. Not only does it provide insurance against appliance or system malfunction, but it can also be leveraged to create a competitive advantage in a multiple offer situation. The home warranty can obviously be purchased by the home owner, but it can also be purchased by a home buyer as part of carefully constructed offer that provides unique peace of mind to both parties in a transaction. If you have questions about home warranties and how they can be used in a real estate transaction, please give me a call.
How does it work?
l If a home system or appliance breaks down or stops working, you call the home warranty company.
l Your home warranty company will call a service provider it has a business arrangement with.
l The service provider will call you to make an appointment.
l The service provider will fix the problem. If an appliance or system is malfunctioning and can’t be repaired, depending on your contract coverage, your home warranty company will pay to replace and install the appliance.
l You will pay a small trade service fee (usually less than $100).
What’s not covered? Check your specific policy, but in general:
l Outdoor items such as sprinklers
l Refrigerators, washers, dryers and garage door openers
l Spas and pools, unless specific coverage requested
l Permit fees
l Haul aways
What can cause denial of a claim?
l Improper maintenance
l Code violations
l Unusual wear and tear
l Improper installation
General coverage includes
l Air conditioning
l Furnace/heating systems
l Water heaters
l Garbage disposals
l Inside plumbing stoppages
l Ceiling fans
l Electrical systems
l Range and oven
l Telephone wiring
Your responsibility is to read thoroughly and understand your warranty before you agree to the terms. Be sure to clear up anything you don’t understand before you sign anything.