subject: Do I Need A Home Warranty To Sell My Home? [print this page] Home warranties are basically for the benefit of the buyer, not the seller. A home warranty is a product you can buy to cover minor repairs to the property, things that might go wrong after the home changes owners. First time homebuyers are especially vulnerable to the idea of a home warranty because they are not familiar with the costs associated with home ownership. When I sell my home I rarely consider offering a home warranty, even if I sell to first time homebuyers.
But, if the idea of offering a home warranty interests you because it may attract more buyers for your home then here are some important things to know. The first thing to keep in mind is that not everything is covered under a home warranty. Outdoor faucets, spas, pools and sprinkler systems are not covered, and refrigerators, washers, dryers and garage door openers are rarely covered. Construction permit fees for remodeling and trash removal after remodeling are not covered.
Keeping in mind the above exceptions, and also the fact that improper installation, maintenance or code violations can void the home warranty for covered items, here's a list of items that will probably be covered on the buyer's behalf under a home warranty: air conditioning, dish washers, doorbells, furnaces/heating systems, water heaters, ductwork, garbage disposals, inside plumbing problems, ceiling fans, electrical system, telephone wiring, stoves and ovens. That's a pretty comprehensive list, especially for first-time homebuyers who may be overwhelmed with their new responsibilities. So you might choose to offer a home warranty, although I always sell my home without one.
My reasoning is simple - home warranties are expensive and add several hundred dollars to my cost when I sell my home. I have to increase the price of my home as a result, so I just tell my buyers to purchase their own home warranty if they require the peace of mind in order to buy a home. The other reason I don't like getting involved with home warranties is that it's not a cut-and-dried service at all. Home warranty companies are in business to make a profit and they will often attempt to deny coverage on an item or issue, requiring the home owner to fight for coverage and reimbursement. I'd rather not get in the middle of these fights, so that's why I stay away from them when I sell my home.
All the many risks of home ownership cannot be foreseen, but they can be covered in a monthly budget. My suggestion to all homeowners, not just first time buyers is to budget for unseen home emergencies and then you'll be prepared to pay for them without the hassle of dealing with a warranty company.
