Bob Kutschbach, owner and broker of Carleton Realty, explains home warranties and why they are so important.
When buying a home you have the opportunity to purchase a home warranty. 85% of buyers request one, usually asking the seller to pay for it which is all based on the negotiation of the purchase contract.
Why is the home warranty important for the buyer? It protects the mechanicals, such as the furnace, hot water tank, plumbing. electric, and appliances, for usually up to a year. There is typically a “trip charge” or “service fee” to come out to check on the equipment in question, paid by the homeowner. This gives s the buyer peace of mind in that first year in a new home. However, there are limitations to the warranty. You must read your coverage to find out what is covered. For example, most times a geothermal system is not covered or there is a cap on the coverage. Make sure to look into your maximum coverages.
For the seller, a home warranty is important to start as soon as you list your home. This will cover any unexpected breakdowns during the listing or contract period before closing. If something breaks just after a home closes, the buyer is suspicious that the seller has hidden a defect in the home. If a home warranty company fixes it, there is no potential lawsuit. This also covers the real estate agent from potential wrongdoing by fixing it. No harm, no foul!
To protect everyone involved in the sale of a house, ask that the home warranty be put in place as soon as a contract is reached if it is not already. Just in case something happens at the inspection or before closing.
If you have questions about home warranties or real estate reach out to one of our agents!