Why Do Realtors Push Home Warranties?
When you are buying or selling homes, one of the things that the realtor may try to sell you on is a home warranty. So, why do they push them so hard? There are several reasons.
In this guide, we will discuss some of the reasons why realtors recommend home warranties and how they can benefit you as a homeowner.
What Exactly is a Realtor?
A realtor is a licensed professional who helps people buy and sell homes. They are experts in the housing market and can help you negotiate the best deal on a home.
They also typically have relationships with local lenders, title companies, real estate agents, buyers agents, the real estate industry, and other real estate professionals who can help you with your purchase or sale.
Why Do Realtors Recommend Home Warranties?
They typically recommend home warranties because they can provide peace of mind to the buyer. If there are any problems with the home, as discovered from the inspection, the warranty will cover the cost of home appliances and home maintenance. This can be especially helpful if you are buying a home that is older.
Home warranties can also help homeowners sell properties faster and for more money. Buyers are typically more interested in homes that come with a warranty, as it eliminates one of their potential concerns.
What are the Main Benefits of Getting a Home Warranty?
Some of the main benefits of getting a home warranty include:
- Peace of mind - Knowing that you are covered if something goes wrong with your home can be very reassuring.
- Eliminates one of the buyer's potential concerns - When you are buying a home, there are always a lot of things to worry about. By having a home warranty, you can remove one of the buyer's potential concerns.
- Can help you sell your home faster and for more money - Most buyers are interested in homes that come with a warranty.
- Covers repairs or replacements to appliances and systems in your home -This can be helpful if something breaks down due to normal wear and tear. Unexpected repairs can be costly, so a home warranty can help you avoid those expenses.
What's the Difference Between a Home Warranty and Home Insurance?
Home insurance is a type of coverage that protects your home from damage or loss. It typically covers things like fire, theft, and wind damage.
A home warranty, on the other hand, is a contract between you and a service provider. It covers home repairs or replacements to appliances and systems in your home that break down due to normal wear and tear.
How Much Does a Home Warranty Cost?
Typically, a home warranty costs between $300 to $600 per year. The cost will depend on a variety of factors, including the size of your home, the age of your appliances, and the number of covered items.
What to Consider Before You Buy a Home Warranty?
Before you buy a home warranty, there are a few things you should consider:
The size of your home
The cost of a home warranty will vary depending on the size of your home.
The age of your appliances
The older your appliances are, the more likely they are to break down.
The number of covered items
The more items that are covered under warranty, the higher the cost will be. Major appliances, such as the refrigerator or oven, are typically covered, but smaller appliances may not be.
How long the warranty is valid for
Warranties typically last for one or two years.
The company’s reputation
It is important to choose a company with a good reputation.
The coverage
Home warranty coverage can vary, so be sure to read the fine print.
What are your own needs and budget?
Only you can decide if a home warranty is worth it for you.
Waiting period
Most home warranties have a waiting period, so you may not be able to use the warranty right away.
What’s Covered by a Home Warranty?
A home warranty typically covers repairs or replacements to appliances and systems in your home that break down due to normal wear and tear.
Here is a list of some of the items that are typically covered by a home warranty:
- Heating and cooling systems
- Water heaters
- Refrigerators
- Ovens
- Washers and dryers
- Dishwashers
- Toilets
- Garbage disposals
- Ceiling fans
What Doesn’t a Home Warranty Cover?
1
Pre-existing conditions
If your appliance or system breaks down due to a pre-existing condition, the warranty will not cover it. Pre-existing conditions are problems that were present before the warranty was purchased.
2
Accidents
If your appliance or system is damaged in a fire, flood, or other accident, the warranty will not cover it. Accidents are unplanned, unexpected events.
3
Damage from pets
If your pet damages your appliances or systems, the warranty will not cover it. Broken appliances or systems as a result of a pet’s chewing, scratching, or urinating are not covered.
4
Malicious damage
If someone intentionally damages your appliances or systems, the warranty will not cover it.
5
Theft
If your appliances or systems are stolen, the warranty will not cover them.
6
Improper use
If you misuse your appliances or systems, the warranty will not cover it. For example, if you overuse your dryer and it breaks down, the warranty will not cover it.
7
Problems caused by natural disasters
If a tornado, hurricane, earthquake, etc., damage your appliances or systems, the warranty will not cover it.
8
Repairs made by unauthorized personnel
If you have someone other than a licensed professional repair your appliances or systems, the warranty will not cover it.
What are the Types of Warranties?
There are four types of warranties:
1. Manufacturer's warranty
This is the warranty that comes with your appliance or system. It is usually a short-term warranty, and it does not cover everything.
2. Extended warranty
An extended warranty is an optional policy that you can purchase to extend the coverage of the manufacturer’s warranty.
3. Service contract
A service contract is an optional policy that you can purchase to have a technician come to your home and repair your appliances or systems.
4. Home warranty
A home warranty is an optional policy that you can purchase that will cover the repairs or replacements of many of your appliances and systems, including those that are not covered by the manufacturer’s warranty or an extended warranty.
What are the Pros of a Home Warranty?
The pros of a home warranty are:
- It covers many systems and appliances - A home warranty will usually cover most, if not all, of your appliances and systems.
- It is affordable - The cost of a home warranty is often much less than the cost of repairing or replacing multiple appliances and systems.
- You don't have to worry about it - Once you have a home warranty, you don't have to worry about the cost or hassle of repairs or replacements if one of your appliances or systems breaks down.
- It is easy to use - Most home warranties have a simple online application process, and you can usually get a quote within minutes.
What are the Cons of a Home Warranty?
The cons of a home warranty are:
- You may not be able to use it immediately - Most home warranties have a waiting period, so you may not be able to use the warranty right away.
- It doesn't cover everything - Make sure you read the fine print and understand what is and isn't covered under warranty.
- Service call fee - There is usually a service call fee for each visit from the technician.
Frequently Asked Questions
1
Is a home warranty plan ever worth it?
Yes, home warranties are worth it, but depending on the size of your home and the number of appliances and systems that are covered. A home warranty company usually has a calculator on their website that will help you determine if a home warranty is worth it for you.
2
Do home warranties transfer when I sell my house?
Home warranties do not typically transfer when you sell your house. However, some policies may allow for it. The new homeowner will be responsible for renewing the warranty, if necessary. The home warranty process is very simple, and the company usually has an online form that you can fill out to transfer the warranty. Be sure to read through your specific warranty to see if it does or does not allow transferring.
3
What is the difference between realtor designation and real estate agent license?
The difference between a realtor designation and a real estate agent license is that a realtor has taken additional training and passed an exam to become certified. A real estate agent is someone who has just been licensed to sell real estate.
4
Is a real estate transaction coordinator the same as a Realtor?
No, real estate transaction coordinators are not the same as Realtors. Real estate transaction coordinators are professionals who help to coordinate the paperwork and details of a real estate transaction.
Realtors often recommend home warranties to their clients because they can be valuable protection in case something goes wrong with your appliances or systems. They are affordable, easy to use, and cover many items.
However, it is important to read the fine print and understand what is and isn’t covered under the warranty before you purchase one to make sure it is the right fit for you and your needs.