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How Using a Home Warranty Can Help You Sell Your House Faster

Home warranties can be a good protection policy in some situations. Although, there is a lot of controversy surrounding them and it’s a fact that these plans do not benefit everyone equally. Home sellers, however, are among those for whom a home warranty can be a great asset as it will help them sell the property faster and at a higher price. The trick here is to find the right kind of plan.

In essence, a home warranty is the same as a manufacturer’s warranty, but with a much larger scope. Instead of one device, it covers a variety of home appliances and systems (including plumbing, ducts, electrical wiring, etc.). Also, it protects you not only in case the malfunction is caused by some inherent fault in the device’s design. Home warranty plans cover a variety of causes and should pay for repairs caused by all most common breakdowns. What’s more important, the home warranty company is the one to contact all contractors, so the customer only needs to file a claim with them and wait for repairmen to arrive.

Benefits of Using a Home Warranty When You Want to Sell a House

The main purpose of a home warranty plan is to provide homeowners some measure of protection from unexpected expenses. Therefore, it might be hard for some to see how a home seller will benefit from it. However, these plans are a win-win solution for both parties of a real estate deal.

When purchasing a house covered with a home warranty plan, the buyer gets reassurance that the systems and appliances in the building are in good condition. Otherwise, the home warranty plan would have been too expensive and useless for the seller to buy.

The buyer also has the confidence that even if something does fail, their coverage will help deal with the expense without much stress for their wallet. Considering how expensive moving to a new house is, this peace of mind can be an important motivational factor.

In their turn, the sellers get to close the deal faster and even sell the house for a higher price. Both of these are consequences of the buyers getting more motivation to purchase this particular protected property. The deal is great for the seller because they can easily find plans for up to $600/year. In the meantime, the average sale price for a house with a warranty is $2,300 higher than that of an equal house without this protection.

When you consider these things, it becomes obvious why home warranties are so popular among real estate agents and home sellers. This is one of the few situations where everyone involved benefits in some way. At least it will be like this if the home warranty plan in question is reliable.

How a Home Warranties Can Fail & How to Avoid That

For all the advantages that home warranty plans offer, you need to be extremely careful with them. Many providers of these plans are infamous for not honoring their obligations and outright scamming. There are many scandals and court cases associated with these companies, like the Choice Home Warranty paying out $780,000 in a settlement over misleading promises in its advertisements.

This matters to home sellers who want to use the plan as a marketing tool because buyers hear about these scandals and can do basic research to learn about the home warranty offered with the property. If they know that the plan on offer is unreliable, using it can backfire on the seller. Because instead of seeing it as a way to protect the buyer’s interests, they will see it as a way for the seller to make more money disregarding and disrespecting them in the process.

To avoid such problems, you should research home warranty companies thoroughly and purchase a plan from one that can be trusted. Find out answers to the following questions in order to identify reliable home warranty providers:

  • What exactly does the plan cover?
    The coverage of home warranty plans varies and you always need to study the details. For example, it might state that the plan covers an AC unit, however, the fine print will state that some types of repairs (usually the most expensive or common) are excluded from the coverage.
  • What are the coverage limits?
    There will always be the maximum payout amount for a home warranty plan. Research the cost of appliance repairs to determine if the amount on offer is sufficient.
  • What are the claim filing terms?
    Many home warranty companies require customers to file a claim within 24-48 hours, which might be very difficult and inconvenient. Look for a service with the most reasonable claim filing terms.
  • What are the contractors that will conduct the repairs?

As home warranty companies have their own networks of contractors, you’ll need to do some extra research to learn how good and reliable they are.

Do not forget that you should also study customer as well as independent expert reviews to get a more objective idea about the reliability of a home warranty company.

 
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