Friday, March 21, 2008

Home Warranty - should I bother?

Today it's more and more common to provide a Home Warranty when you sell your home. On the west coast, Home warranties are commonplace and almost required. Here in Illinois they are fairly common - especially on older homes. And you always get a warranty when you purchase new construction.
A typical home warranty will cost between $300-$400 dollars. I typically offer my clients three different Home Warranties: HWA, HMS or Kettley Realtors Warranty.



There are many different home warranty companies available and I'll give you a list of some of the ones I've found at the end of this blog. But first, we'll talk about why you should use one. With an older home, a home warranty just gives a buyer peace of mind. Typical buyer questions about your home will be "How old is the roof", "how old is the furnace", "have the windows been replaced", etc. They want to know about all the "Major" upgrade items they may have to shell out for after buying the home. Nothing is worse that finding out you have a major repair on a home you just bought.
Because all home warranties are different - I'll use HMS as an example. This is one of the warranties I often recommend and they have excellent phone support when you have a problem. HMS offers a home warranty on a single family home, townhome or condominium for $399.00. This covers the following: Electrical, Plumbing, Water Heater, Sump Pump, Oven, Range, Stove, Built in Microwave, Refrigerator, Built in Dishwasher, Washer, Dryer, Garbage Disposal, Built-in Trash Compactor, Central Vacumn system, Garage Door Opener, Ceiling Fans, Door Bell Chimes. Heating & AC systems are included for the buyer - but cost an extra $70.00 for the seller. You can also purchase optional coverage for a jetted tub, well pump, swimming pool or spa.
As you can see - you get a lot of coverage for $400 dollars. When this is provided as part of the marketing package - a realtor can market the coverage and piece of mind when marketing the home. I can even put a sign rider in front of your house that says "Covered by a Home Warranty". Think about the first time you bought a new home. How nervous were you? I know I was nervous. Having a home warranty takes a lot of worry out of the process. The second advantage is - you are covered. From the moment your house is listed or when you purchase that home warranty - you as a seller are also covered for the systems I mentioned above. If you have purchased a second home already - this can really help alleviate the worry of taking care of two homes. Something goes wrong - your covered.
Most home warranty companies work in a fashion similar to HMS. Each has a list of the sytems/items covered, available upgrades, cost and deductible. Most have a $100.00 or $200.00 deductible per "visit" by a contractor. So it's best to wait until you have several items that need to be taken care of.

Here is a list of some of the Home Warranty Companies out there:

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