Home warranties are a great way to add value to your Pioneer Valley home for sale, while providing a level of confidence to a home buyer. They can save the future owner of your home money on costly repairs and save them time searching for a contractor. If you are selling your Pioneer Valley home, including a home warranty is a worthwhile investment. However, it is important for the home seller and the home buyer to understand the terms of the warranty because they aren’t blank checks.
Home warranties are contracts that provide for the replacement or repair of items like heating & air-conditioning systems, electrical & plumbing systems, and water heaters. Although I advise home sellers to purchase a warranty to include in the sale of their home, home owners can also buy them for themselves, regardless of whether or not they intend to sell.
While there are numerous home warranty companies out there, they are not all the same. As with anything, some home warranties are better than others. Home warranties aren’t insurance policies, but their contracts are just as specific as that of the insurance industry.
When considering a home warranty, it is important to read the fine print to find out exactly what systems are covered and what systems aren’t covered. It is also important to understand which components within those systems are covered, which components are not covered, and under what circumstances those systems and components are covered.
A home seller or their listing agent do not want to misrepresent the facts to a home buyer, which is why they should understand the terms of the warranty they are including in the sale. A home buyer should also understand the terms of what they are accepting from a home seller as well. People hear “warranty”, they often think that it is a “guarantee”, which is never the case. When choosing a home warranty company, always review the terms of their product because some home warranty companies cover more items than others. Some home warranty companies offer different levels of coverage, while other do not. All home warranties have limitations.
One limitation to look for in a home warranty is whether or not it includes coverage for “unknown pre-existing conditions” or “insufficiently maintained equipment”. Although some home warranty companies may offer this type of coverage in their basic plans, some may charge extra for such coverage. The Warranty Group offers a home warranty for $399, according to their website. It covers many of the same systems as American Home Shield, but it does not cover improperly maintained equipment, whereas American Home Shield does offer this type of coverage as part of their core plan.
American Home Shield charges $475 for their home buyer coverage core plan. They also offer an expanded coverage plan that for $555. A warranty that covers both the home seller while the home is listed for sale and the home buyer(s), which covers the buyer for a year after the closing can also be purchased for a higher fee. The core plan covers the major systems that you would expect from a home warranty. The more expensive plan covers additional items like ceiling fans, central vacuum systems, telephone wiring, and improper installations. While American Home Shield and the Warranty Group have basic plans that cover the dishwasher and the stove, coverage for the refrigerator and washer/dryer will cost extra.
The costs of a warranty usually range from $350 to $600, depending on what is covered. The cost of the deductible ranges as well. It’s been my experience, as I’m sure that it has been yours, that consumers get what they pay for. So don’t look for a bargain when shopping for a home warranty.
REALTORS® like myself regularly sell home warranties, but it is only done so as a service to our clients and we do not receive any commission from the warranty company.
A home warranty can be a great value for a home seller and a home buyer. However, when shopping for a home warranty, the devil is in the details. Never purchase one if the home warranty company doesn’t stipulate exactly what is covered and how it is covered in writing, as the two home warranty companies cited in this article do.
Here is a list of other home warranty companies that service Pioneer Valley with links to samples of their service contracts. A more detailed list can be found by clicking here.
Home Warranty Company Service Contract Sample
If you are planning on buying or selling a home in the Pioneer Valley, make your first call to Michael Seward at 413-531-7129 or email email@example.com.