Home Warranties Help Limit Real Estate Risk

Spring has sprung and that garnishes an increase in activity in the real estate market. Buyers are out and about seeing properties and sellers are getting their homes ready for the market. These can be exciting and anxious times for the people on both sides of the transaction and there are some good practices that can be used to limit the risks to everyone involved.

Home warranty protection is one way to increase a buyer’s confidence about their decision to purchase a home. A home warranty is a policy that pays for repair or replacement of any covered appliance or home system that malfunctions under normal conditions of use. This generally includes attic and exhaust fans, central vacuums, trash compactors, heating systems, electrical systems, stoppages, plumbing systems, water heaters and duct work, regardless of the make or model.

Not only does the home warranty protect the seller from having to take care of problems and system failures after the sale, but it also offers them many of the same coverages during the term of the listing. A home warranty is basically an insurance policy. The cost of the warranty (usually less than $400) can be considered the premium and the service fee for a claim (usually less than $100) is like the deductible. These warranties can be renewed indefinitely year after year by the buyers if they want to extend their coverage.

The goal in limiting risks by using warranties is to make the real estate transaction as transparent as possible by insuring it with a warranty.

The relationship among the buyers, sellers and Realtors involved is sometimes delicate and every bit of assurance is valuable to make it through a sometimes emotional process of buying/selling a home. Happy home hunting!