Here at Fresh Air Real Estate, we provide Seller’s Home Warranty Coverage on EVERY LISTING we sell! (Seller Coverage provided with 2-10 Home Warranty, https://www.2-10.com).
You really can’t beat the peace of mind when listing & selling your home that you’re likely to be coveredshould unexpected repair needs arise when you’re on the market or during a transaction. This includes issues resulting from normal wear & tear on your HVAC, appliances, plumbing & electrical systems. Offering your home buyer continued coverage with their own Home Warranty when the sale closes is something Sellers also should seriously consider when discussing their listing & market strategy with Jackie.
If you’re a homeowner who already has a Home Warranty Service Plan (HWSP) in place or is offering to provide a HWSP to your Buyer, you’re making smart choices! That service agreement stays with the home and is transferrable to the new homeowner. And it will be much appreciated by your buyer! A whopping 8 out of 10 home buyers prefer to purchase a home with an existing home warranty. Make your sale more attractive & reduce your market time!
For home buyers, a HWSA helps to protect against the financial risks which come with owning a home. Again, your Fresh Air Realtor will always pay half the cost of your standard home warranty at Closing! When 59% of all US citizens live paycheck to paycheck, you can’t beat the budget protection when a costly repair arises. Owning a home is expensive. Homeowners can expect to pay 1-3% of their homes purchase price on home maintenance every year & system failures will occur in 7 out of 10 homes. When 40% of all Americans can’t pay a $400 bill without going into debt, having additional coverage can be a real wallet saver.
Plus, Sellers and Buyers also get to work with an establish, trusted network of service contractors who have already been vetted by the home warranty company. (Note: Be sure to confirm with a home warranty rep representative their vendors are insured!)
So, what exactly is a HWSA & how does it work? The agreement offers protection for major systems (HVAC, plumbing & electric) and appliances. It is a service contract generally for the repair and/or replacement & covers failure due to “normal wear and tear.” The item needs to be in working order at the time of the home purchase for it to be covered under a policy (AKA, no “pre-existing conditions.”). Service Agreements have specific exclusions and/or limitations to keep coverage affordable for homeowners. Coverage may vary depending upon the company, region and/or state requirements.
There are three main factors Providers consider when evaluating the best solution for a repair: 1. Cost; 2. Life expectancy of the failed system; and 3. Customer experience.
Every service request is unique. A variety of factors will influence the timeline: Contractor availability, weather, the complexity of the repair or replacement, and if parts need to be ordered. (Note: A HWSA is not considered an “Emergency” solution, as service departments keep regular business hours & are not open on the weekends. That said, a trusted rep should be able to guide you through some emergency tips & tricks to get you through until your service tech can arrive.)
If a service request is ineligible for coverage, the homeowner will be notified by the provider, but is still responsible for the service fee. A few warranty providers will refund the service fee if a failure is not eligible for coverage, which is extremely valuable for the homeowner.
Many homeowners ask, “If I Have Homeowners Insurance, do I Still Need a Home Warranty?” Homeowners insurance & home warranties provide different coverage. Insurance provides coverage for damage or loss to home & personal belongings from natural disasters, fire & theft. Policies are run for a 1-year term; have an annual premium; are renewable; and have a deductible of $500 or more. A HWSA provides coverage for repair or replacement of major systems & appliances due to normal wear & tear. They have 1-5 year terms; require an annual payment; are renewable; and have a service fee of $100 or less.
The coverage provided by homeowners insurance and HWSAs do not overlap! Rather, each offers protection for different components of the home & under different circumstances.
By the Numbers:
- A HWSA typically costs $600-700 in the Denver Metro area for the policy with the most coverage. With a median sales price for a single family home at $613,500 in the Denver-Metro area (as of January 2024), that’s less than 1% of the total purchase price!
- Homeowners place an average of 1.4 service request per year. This means the policy could potentially pay for itself in 1-2 service calls, depending up on the cost of the approved repair or replacement.
- The Service Fee is typically $125 or less.
Here are some good questions to ask a sales representative about their HW program features & coverage:
- Do you have age restrictions or depreciation? What is your NLA policy (parts No Longe Available).
- Do you have a max payout on HVAC, do you have a max on refrigerants, do have unlimited refrigerants, do you cover compatibility issues (Seasonal Energy Efficiency Ratio, or SEER ratings)?
- What is your percentage of claims paid?
- What is your claims escalation process? Will you speak with the customer before & after transaction, and will you help with claim issues?
- Do you guarantee your service fee for the life of the warranty? Will you refund it if the claim is not eligible for coverage?
- Are you available after hours when I am negotiating contracts?