markgalloway.com

When buying a home, it seems that Murphy’s Law invariably takes effect. For example, just since we moved into our home less than a year ago, it seems like everything has given us trouble:

• Dishwasher died
• Refrigerator froze up
• Weird electrical issues
• Garbage disposal broke
• Sewer pipe is made out of Orangeburg so it blocks up easily

….you know, stuff happens, literally and figuratively. According to TWG Home Warranty Services, the largest home warranty company in the U.S., over 60% of all home buyers experience a breakdown of a major system or appliance during their first year of ownership.

A Buyer can spend a few hundred dollars to protect their new purchase with a home warranty, and many do. But, how much more comforting and reassuring for a Buyer than when a Seller includes a home warranty!

Now, there are liability limits and some items aren’t covered at all, but for the “normal” stuff that usually breaks, there is some level of protection. Like any kind of insurance, there’s a deductible on most home warranties ($50-$100) that will make some repairs nonsensical. I mean, if it costs $70 to have the garage door opener fixed and the deductible is $75……you get the point.

From the Buyer’s perspective a home warranty could be the last straw that tips the scales in the decision making process if they are deciding between two homes. And for those cynical buyers, who believe every Seller is lying about the condition of the property, this is a great way to offer some reassurance that it’s a safe buy!

So, what’s it going to cost me as a Seller?

Home warranties vary in price based on the type of property and the level of coverage. Count on anywhere from $350 to a $1000. Ask your listing agent if their brokerage has the ability to sell home warranties. United Country, for example, has a great home warranty program that is very competitively priced and I encourage all my sellers to offer one. It’s a small investment that can pay dividends when you need it to.

One nice thing about the home warranty I offer my clients is that it doesn’t have to be paid for until closing. This allows the Seller the ability to offer the protection without having to come up with the cash for it until the settlement occurs.

In this age of tighter lending money, higher foreclosure rates and an overall cooling in the real estate market, as a Seller, the ultimate cost of not offering a warranty could be the sale of your home!