A home warranty is a service contract that covers the repair of replacement of many of the most frequently occurring breakdowns of home system components and appliances. But there are two schools of thought on home warranties for sellers listing their homes. I have actually had buyers ask me why the seller had paid for a home warranty upfront.
Answer is, sometimes sellers are led to believe that this is a good thing because it makes it looks like they are standing behind the sale and it is a way of saying if anything breaks down for you, we will make sure you get it replaced/fixed so there are no hard feelings. Others look at it like there is something possibly wrong and the sellers are stepping up so the buyer is covered just in case.
Most listing agents coax the seller into paying for this upfront during the listing time on market just in case something goes wrong. The agents of course, typically get a percentage of the home warranty and this needs to be disclosed up front.
Personally, I like to use it as a bartering tool. Some of my sellers haven't committed to paying for it upfront, but when negotiating, it can be a great tool. Negotiations during the offer process can use anything available, carpet allowance, seller agrees to pay some of buyers closing costs, or hey, seller will pay for a home warranty.
Either way, it is a good thing and is a benefit to the buyer. But as a buyer, don't just assume that your entire HVAC system will be covered if it breaks down in July after you bought your house in May, look into the home warranty that is actually being offered. You can get all kinds of packages much like home insurance and you need to make sure upfront, what is exactly covered or included. Get the facts in advance.
We are here to help you make those kinds of decisions. Whether you are looking at our listings, or we are buyers agents for you, helping you find your next home sweet home. We are here to help and to advise.
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Mary Welch-Broker/Owner Preferred Choice Realty Harper, Ks.
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