Every homeowner who’s selling a home wants to sell it quickly and for a good price. Every home buyer wants to know that the new home he or she is purchasing won’t manifest a broken HVAC system, some burst pipes or a dying major appliance within months of closing. While it’s not possible to predict all the problems a home might develop, especially if it’s an older home, there’s a way for both sellers and buyers to get what they want.
It’s called a home warranty. When you offer a buyer’s home warranty on the house that you’re selling, you’ll be in a better position to entice buyers to pull the trigger on this biggest of big purchases. Buyers will feel more comfortable about purchasing a home if they know there’s some amount of protection for them, should something go wrong. That means you’ll sell your house faster, and get more for it, than you might if you offered it without a warranty.
How a Home Warranty Provides Peace of Mind
A home warranty plan offers coverage for home systems and appliances that might need repair or replacement, such as plumbing, electrical, HVAC, large appliances and structural elements. When something malfunctions in the home, the warranty company sends out a local contractor to assess and repair it. The homeowner pays a small service fee, usually in the neighborhood of $40 to $75, and the home warranty company picks up the rest of the tab.
Home warranties can provide a lot of peace of mind, especially for those living in older homes or for buyers looking at homes that come with used appliances. They can defray much of the cost associated with repairing or replacing home systems. For example, the average HVAC replacement can cost $4,000 to $5,000; a water heater replacement can cost $2,000; and a new washer and dryer can cost as much as $4,000. These repair costs often crop up unexpectedly, and many homeowners struggle to manage them on their own.
What a Home Warranty Does for Sellers — And Buyers
A home warranty for sellers can have multiple purposes. Many sellers use them to defray the costs of repairs that a home may need during the listing period, when the seller may be making two mortgage payments and may be short on funds to cover unexpected repairs to a home that’s on the market. Many home warranty companies offer free listing coverage to sellers who choose to offer a buyer’s home warranty.
But that’s not the only benefit a home warranty can have for sellers. Offering a home warranty to buyers help you sell your home faster — on average, 11 days faster than if you didn’t offer one. You can either transfer an existing home warranty to your buyer at closing, or you can offer a new policy to last for one year from the date of closing. Buyers will typically part with more money to purchase a home that comes with a warranty — $2,314 more, on average. Compare that to the average yearly cost of home warranty premiums, which range from $300 to $500, and you’ll see that a warranty is worth a lot to a buyer.
No buyer wants to purchase a new home and then have to fork out thousands for a major repair right away. Most new homeowners feel a bit strapped for cash, what with the new mortgage payment, closing costs and the costs of moving into a new home. When a seller offers a buyer home warranty, the buyer can proceed confidently into the purchase, knowing that he or she will have time to build up a cushion again before having to worry about covering the cost of major repairs.
Who doesn’t hope that the sale of their home will take place as soon as possible after putting it on the market? Don’t let your home languish in the listings for months. When you offer a buyer’s home warranty along with your home, you’ll be selling more than just a residence; you’ll be throwing in the peace of mind that comes with knowing major repairs won’t end up compounding the buyer’s debt. Sell your house fast, get more money and move on with your life — offer your buyer a home warranty.