For most people, buying a house is one of the most expensive purchases of their lifetime. As it is an expensive purchase, very often involving a person’s entire life’s savings, it is only natural that a homeowner will expect some additional protection.
A home warranty or a home service contract is a form of service agreement that offers to provide discounted repairs and replacement services for household appliances. When paired with a property sale, it has been noted that homes sell faster and at higher prices. Recent market studies have confirmed that homes with home warranty sell 10% faster than those without. Over the years, it has become one of the incentives that home buyers eagerly expect when they make a purchase.
In a recent survey conducted by the American Home Shield, it was clearly seen that homes sold with a home warranty sold faster and at higher rates. Following are the assertions from the study:
As mentioned before, home service contracts provide budget protection to the homeowner. When a buyer makes a purchase and receives a home warranty along with it, he also receives the following benefits. Let’s take a look at some of the benefits the buyer gets:
If these points are not compelling enough, here’s a list of benefits that the seller will receive. Yes! This is a deal where people at both ends of the stick score high. Here are some of the seller benefits
In some cases, real estate agents often purchase transferable home warranty contracts for a property that is to be sold. Once the deal is closed, the protection becomes effective thereby reducing the agent’s liabilities.
From the points discussed above, it is quite clear that combining a home warranty with a home sale benefits both buyer a seller. Hence, a home warranty effortlessly increases the value of the property.
In a property sale, 3 types of home service contracts are commonly seen
No matter how attractive a home service contract may seem, there are times where it is a bad deal. Here’s one such situation. A home, if it is new, stands very little chances of encountering appliance/ system crashes. Also, home warranty covers damages that occur due to regular use and wear & tear. Such damages are more likely with appliances that are over 4 years old. So, in cases where the home is new, a home warranty, no matter how attractive, could be unnecessary.
It is unlikely that a real estate agent would ask this question. Most agents have a company that they always rely upon for home service contracts. If you are a first time seller, we suggest that you talk to a few agents before picking a plan. Speak to your friends and family who have experience in home sales and related aspects.
Another option is to visit home warranty review websites. Such sites offer ratings and opinions from customers of home warranty companies. It gives you a hands on feedback about the big players in the industry. This is a very reliable option as user generated feedback is often the ideal way to decide a company’s quality.
From all that has been discussed here, it’s quite clear that, new homes don’t necessarily need a warranty plan. At the same time, it is advised that if you are first time homeowner, you should always have your newly purchased home protected with some form of appliance warranty.
In conclusion, homes that are not new and not under any form of protection are best sold with a warranty plan attached to it. In fact, when homes sold with a warranty sell faster in addition to being sold at higher prices. Nothing good can come out of putting yourself and the buyer at inconvenience. So, do visit some review sites and listen to the Vox Populi!!
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