subject: Should You Offer A Guarantee When Selling Your House? [print this page] Although you may be told differently, home warranties primarily benefit the buyer, not the seller. You can buy a home warranty to cover minor repairs to the property after a sale, to cover certain problems that may occur. First time homebuyers may be more attracted to the concept of a home warranty because they are typically a little intimidated by the costs associated with home ownership. But I rarely consider offering a home warranty when I sell my house.
But, if you feel it may attract more buyers for your house, or if you see that other comparable homes offer warranties and you have to do the same in order to compete, here are some important things to consider. First of all, make sure you understand what is and is not covered by the 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.
As you bear in mind those common exceptions, also know that improper installation, maintenance or code violations can void the terms of the warranty even on covered items. The following list of items will most likely 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. This comprehensive list will appeal to some buyers, so you could choose to offer a warranty, although I always sell my house without one.
I choose to avoid purchasing warranties for my buyers because they are expensive and add several hundred dollars to my expenses when I sell a home, which means I have to increase the selling price of my house. That's why I tell my buyers to feel free to purchase their own warranty if they desire, if they need the peace of mind it brings them. The other reason I don't purchase warranties is that everything isn't always covered the way a homeowner understands it. The warranty companies are in business to make a profit and sometimes they deny coverage on an item or an issue, and they require the owner to fight for their reimbursement. Personally I'd prefer not get involved in these fights, so that's why I stay away from warranties entirely when I sell my house.
Although the risks of home ownership cannot be foreseen, they can be addressed in a monthly budget. My suggestion to all buyers is to budget for unseen emergencies so that you'll be prepared to pay for them without the expense and uncertainty of dealing with a home warranty company.
by: Leo Kingston
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