A home warranty is a type of insurance policy that pays repair or replacement costs for the mechanical systems and built-in appliances that break down in a home. The home warranty can be purchased by either the buyer or the seller of a property and is part of the negotiation process in a Texas real estate transaction.
When the seller is paying for the warranty, it is usually paid for and goes into effect at closing. The coverage period for that home warranty is normally one year and the buyer would then have the opportunity or choice to extend the home warranty at the end of that one year period.
There are a lot of home warranty companies offering home warranties and the coverage of individual policies can vary quite a bit. Usually, central heating and air conditioning systems, electrical, plumbing and major appliances are covered but its important that you read the policy closely and understand what is and is not covered.
The cost for a one year home warranty policy typically runs between $300 and $600 but depends on the size of the home and the specific types of coverage that the policy holder requires. In addition to the policy premium, there is normally a deductible of $60 – $100 to pay when making a repair claim.
While it is true that most home sellers do provide a home warranty in today’s real estate market, it is still a good idea utilize every advantage one has when selling a home. Buyers will also appreciate having a home warranty and will feel more comfortable about buying a home without worrying about hidden problems.
Another reason to agree to providing a home warranty, is that it can result in a higher offering price from potential buyers and thus offset the cost. This make the home warranty an excellent marketing tool for soliciting more interest in a home for sale. In addition to marketing advantages, you could also potentially avoid getting involved in a lawsuit down the road.
When a major appliance, heating or air conditioning system goes bad shortly after a home is sold, its not uncommon for the buyer to blame the seller. Unfortunately, this can and does lead to lawsuits. Providing a home warranty with the sale of a home can go a long way towards preventing these types of lawsuits and thus give the seller some piece of mind.
In some areas where lawsuits are particularly common, almost all homes are sold with a home warranty included.
If a person is buying a home and it doesn’t come with a home warranty, a buyer may still want to consider paying for one. The first year after buying a home is a
time when most people don’t have a lot of cash on hand to cover problems that might arise.
Having a one year home warranty in place can provide peace of mind during this time. Then, if something does break down, a new home owner could really save their budget.
A home warranty can definitely be a valuable asset as a seller places his/her home on the market or as a buyer considers buying a home. However, there are many different companies to choose from and many different options. Here are a few links of some companies that are reputable in the Katy, TX and Houston, TX real estate markets.
These links will allow you to make an informed decision about which company is the best for you. Each is similar and each is different as to what they cover and how much they charge. Research to make sure you get the one that is right for you. There also plenty of other home warranty companies that you can search out and research on your own.
For more information about the Katy area or for any assistance with your real estate needs in Katy or West Houston contact Steve Reddell. He is a licensed real estate agent you can trust with REMAX Cinco Ranch. You can contact him directly at 281-994-5173 and you can also visit him on the web at Reddell Family Homes.