3 Sound Reasons Why You Should Offer a Home Warranty
When you’re getting ready to sell, you’re naturally thinking about what will help the sale go smoothly for you and for the person who will eventually call your house home. A home warranty may be one small way to help on both sides. Depending on the plan, it could provide some protection while your home is listed, give the buyer added reassurance after closing, and offer another way to work through concerns during negotiations.
A home warranty is an optional service contract that may help with the repair or replacement of certain systems and appliances when they fail from normal use. Depending on the plan, coverage may include heating and cooling equipment, plumbing and electrical systems, water heaters, and major appliances.
It isn’t a promise that nothing will break, and it doesn’t cover everything. Every plan has its own limits, exclusions, service fees, and requirements. But used thoughtfully, a warranty may make part of the transition from one homeowner to the next a little easier.
Here are three reasons you may want to consider one.
1. IT MAY HELP PROTECT YOU WHILE YOU’RE STILL THE OWNER
You can take wonderful care of your home for years and still have something break at an inconvenient time. Unfortunately, putting a “For Sale” sign in the yard doesn’t convince the air conditioner, water heater, or dishwasher to wait until after closing.
Some home warranty companies offer seller or listing-period coverage for certain systems and appliances while your home is on the market. Depending on the company and plan, that coverage may be available at little or no upfront cost when buyer coverage is purchased at closing.
If an eligible covered item breaks while you still own the home, the warranty may help with the repair or replacement, subject to the plan’s service fees, limits, and exclusions. That can be reassuring when you’re already dealing with the expenses and details of selling and moving.
Not every company offers this type of seller coverage, so it’s important to ask. If it’s available, though, the warranty may start helping you before it ever becomes a benefit for your buyer.
2. IT CAN BE A NICE WAY TO WELCOME THE NEXT OWNER
You know your home better than the buyer does. You may know that the furnace has been dependable for years or that the refrigerator has never given you a problem. The buyer only knows that those things aren’t brand new—and it’s understandable if that creates a little uncertainty.
A home warranty doesn’t guarantee that nothing will go wrong, and it should never replace a home inspection. But it may provide some added reassurance that certain eligible repairs could have coverage if something does stop working after closing.
That can mean a lot during the first year of ownership, especially for buyers who have just spent much of their available cash on the down payment, closing costs, moving, and settling in.
And if a covered problem does arise shortly after the sale, there’s already somewhere for the buyer to turn. They can contact the warranty provider and begin the claim process rather than feeling as though they’re completely on their own with an unexpected problem.
3. IT MAY HELP WHEN YOU AND THE BUYER ARE TRYING TO FIND COMMON GROUND
Sometimes a buyer really likes a home but has one lingering concern. Maybe the HVAC system is older. Maybe several appliances are included with the sale and have some years behind them. They’re working—but the buyer is thinking about what could happen later.
A home warranty may be one way to address that concern without replacing something that’s still functioning properly. You might offer the warranty yourself, or a buyer might request one in an offer or during negotiations.
Either way, it’s simply one more piece of the conversation. Its cost can be considered along with the purchase price, concessions, closing date, contingencies, and everything else you’re working through together.
If providing the warranty helps both sides become comfortable with the agreement, it may be money well spent. If it doesn’t add meaningful value, there may be a better solution.
TAKE A LITTLE TIME TO UNDERSTAND WHAT YOU’RE OFFERING
Home warranty plans vary in both price and coverage. Before choosing one, look at the systems and appliances included, coverage limits, exclusions, service fees, claim procedures, maintenance requirements, treatment of pre-existing conditions, and other contract terms.
If seller coverage appeals to you, make sure you understand when it starts, when it ends, and what is actually covered while the home is listed. Also find out whether buyer coverage must be purchased at closing for the seller coverage to apply.
A warranty is much more useful when everyone understands what it does—and what it doesn’t do.
DO WHAT FEELS RIGHT FOR YOUR SALE
You don’t need to offer a home warranty simply because you’re selling a house. But there are situations where it can be a thoughtful and practical addition.
It may give you some protection while you’re still the owner, give your buyer a little more comfort as they take over the home, or help both of you get past a concern during negotiations.
If you’re considering one, I’m happy to help you look at the options and decide whether it makes sense for your situation. My goal isn’t just to help you get to closing. It’s to help you feel good about the way we got there—and about handing your home over to the person who’s going to care for it next.
