Home warranties have been popular for many years here in Cleveland Ohio. For those who do not know what they are, they are insurance policies for a home buyer or seller. Sellers can sign up for one while their home is listed and a buyer can accept the one offered by the seller. If one is not offered, the buyers can negotiate it in the contract, and it can be paid by either party, but most often it is paid for by the seller. If the seller will not provide one, the buyers can buy it themselves.
Every home warranty plan differs, and that is the point of this post. Like any other business, there is competition so one company may offer something another company does not. In general, home warranties will cover, heating, cooling, plumbing, and appliance repairs. I have not heard of one that will cover a leaking roof nor a leaking basement. Some will cover the inside damage a leaking roof may cause, but there are limitations.
Each policy will carry a deductible for the buyer. I have seen them as little as $50 but the average is closer to $75. Many will have strict provisions in place. One of the most common ones I know about is that the buyer should always call the home warranty company FIRST, before arranging for repairs. The company will want to approve the repair company and some can even refuse the repair if the new homeowner does not follow protocol.
I know of one plan that covers all appliances except the washer and dryer. The extra cost for those items is around $80.
My point is that all these companies have different requirements and policies.
Most of the sellers I deal with will offer a home warranty plan. It’s attractive to a home buyer and somewhat comforting to know that they have a little extra coverage during that first year of home ownership. However, since they vary so much, I think it’s a good idea to review the home warranty before you agree to it.
It is a good idea for buyers to make the review of the home warranty a contingency of the contract, in the same way you would make an offer contingent upon review of HOA docs or condo declarations and by laws. It will help buyers know specifically what is covered and what is not.
ReMax Trinity | 8751 Brecksville Rd. | Brecksville Ohio 44141
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of Cleveland, Ohio or in the surrounding communities,
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Barb Szabo, e-Pro REALTOR®
I tell my buyer clients that home warranties are really important. Here in Albuquerque typically the buyer pays for their own inspections and the seller pays for the warranty. Most of my clients never use them, but the few who have in the past have really appreciated them!
HI Rich, Thanks for your comments! That’s how it works here as well.