Full disclosure, I am a child of a Risk Manager (yes, just like Along Came Polly). So, of course, I do like home warranties. A home warranty is a service agreement that covers repairs and replacement of certain appliance and systems in the home. Although they are not foolproof, I believe there is a spot for them in certain situations. One great opportunity being this current real estate market. Want to know why I love warranties? Here are three situations where I think they offer a good amount of protection.
Listing a home: There is nothing worse that having a water heater break a week before closing. The hardest part of writing that check is knowing you will not be the one enjoying that brand new water heater. Having a home warranty during the listing period helps elevating this stress and monetary obligation.
Post Occupancy Agreement: It is not unheard of in this market that buyers give sellers a leaseback, ranging from a few days to 60 days. A leaseback is when the sellers can lease the home from the new owners. This secures a home for a buyer and gives the seller time to move and/or find a replacement home. Once the new buyer closes on the home, they are responsible for any repairs even if they do not take immediate possession. Having a home warranty during a leaseback helps avoid an awkward conversation and arguments about who is responsible for the repair (the new homeowner or the “tenant”).
Buyers. Often times, buyers don’t have a lot leverage at inspection and find themselves walking into a home that may need a little bit of work. A home warranty is great for a buyer as it helps with unexpected repairs that may occur through the first year of living in the home.
There are many different home warranty plans to choose from. Plans will differ by cost, what they cover and service fee if a technician is called. If you are currently looking for a home warranty, take a look at these and compare to find one that fits your needs.
How do you feel about a home warranty? Do you think it is worth the money?
Liz is broker and owner of Liz Daigle Realty.
