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Why You Should Include a Home Warranty in a Selling Offer

Why You Should Include a Home Warranty in a Selling Offer

Buying a home has never been a stress-free experience. There’s a lot to worry about: financing the house, making sure you’re not buying a lemon, and legally documenting everything. Although there’s not much that can alleviate the stress that comes with buying a home, there are steps that can be taken to minimize that stress and provide peace of mind to buyers, sellers and real estate agents alike. One of those steps is providing a home warranty with a home’s sale. A home warranty protects the buyer of a home from unexpected repairs and replacements, but it may surprise you to learn that is also protects the seller and real estate agent.

A Home Warranty Protects the Buyer

As a buyer, buying a home is often the largest purchase they’ll make in their lifetime. They want to make sure they’re getting a great deal and aren’t stepping into a money trap. This is where a home warranty is often used to provide peace of mind to the buyer.

A home warranty plan covers systems and appliances in a home, like an A/C unit, furnace or oven, when they fail from normal wear and tear. Unfortunately, all systems and appliances within a home have a lifespan. After they’ve been used for a while, their mechanical and electrical parts may begin to fail because they are old. When those systems and appliances fail, it can be costly to have them repaired or replaced. For example, a new HVAC system can cost $5,230 on average. This is when having a home warranty can protect a buyer. If the home’s HVAC system fails from normal wear and tear, the home warranty will repair or replace the unit for a small service call fee. (This fee ranges between $50-$100 depending on the home warranty company.)

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Chad Holmes, Director of Sales at Landmark Home Warranty, said including a home warranty on a home’s sell can calm a buyer’s worries. “What the warranty does is provides them that additional peace of mind, going forward, if something fails, they do have that warranty in place,” Holmes said. “It lets them know if something breaks down from normal wear and tear that it will be repaired or replaced.”

One thing that buyers should be cautious about, however, is knowing what is and isn’t covered in a home warranty contract. Sometimes home inspections will bring up problems found in the home before closing, and the buyer’s agent may tell the buyer it will be all be covered under the home warranty. The problem with that is there’s a good chance the home warranty won’t cover the pre-existing problem. It is imperative to discuss the problems brought up in the home inspection, because the buyer could get the problems fixed with the seller, or get a discount on the house.

Why wouldn’t a home warranty cover a problem brought up in a home inspection? There are two reasons. First, most home warranty contracts begin on the date of closing. Like any warranty or insurance, a contract won’t cover something that was already broken before coverage started. If a buyer knowingly purchases a home with a broken furnace and then calls the home warranty company to repair it, there’s a good chance they won’t, since it was broken when they bought the home. This is just like if you totaled your car, and then tried to insure it and have the insurance pay for the repairs. It’s industry standard that these sorts of pre-existing conditions aren’t covered.

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Second, most home warranties don’t cover abuse or neglect brought on by a homeowner. If the seller has forgotten to change out his or her furnace filter for years and this is noted on the home inspection, the buyer should not expect this to be covered by a home warranty. They should ask the seller to provide some sort of compensation or repair the furnace before they purchase the home.

A home warranty’s main function is to repair or replace systems and appliances that fail from normal wear and tear. If a buyer understands what is and isn’t covered in a home warranty contract, they can better use it to help them offset expensive and unexpected repairs, Holmes said. “Although a home warranty isn’t a coverall, it gives homeowners the ability to take care of things that are unexpected expenses that come as a part of home ownership,” he said.

A Home Warranty Protects the Seller

At this point, it may seem like a home warranty is only beneficial for a home’s buyer. In fact, a home warranty can also protect the seller. Kimberly Cameron, Realtor and Associate Broker at Re/Max Properties West, said she includes a home warranty with every listing.

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When a seller includes a home warranty in a selling offer, most companies offer free listing coverage. This means the seller doesn’t have to pay for anything except service call fees up until the date of closing, Cameron said. At that time, if the buyer wants the home warranty, the seller will pay for their plan.

“If a buyer does not request a warranty, it is cancelled prior to closing with no charge to my client,” she said.

Shelly Walters, a Realtor for Re-Max Ability Plus, said this free listing helps the seller in two ways. Not only can it cover problems brought up by the inspection as long as they’re caused by age and normal wear and tear, but it can save the sellers money. “Since the home warranty covers a seller during the listing, I tell them it is a no lose situation,” she said. “If the sellers don’t choose the home warranty that they want to put with the listing, the buyer may request a much higher value of the home warranty. Therefore, they are also choosing the home warranty price.”

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Not only that, but according to a study done by American Home Shield, a home warranty sells a home faster and for more money. Holmes said this was most likely because a buyer feels more secure in buying a home with home warranty protection. “As the homeowner is looking at these homes, and comparing them, and they see that one home includes a home warranty they feel more comfortable buying it because they know breakdowns will be taken care of,” Holmes said. Bradley Asbury, Realtor/Agent for Century 21 Homestar, said he provides a home warranty on each of his listings for this reason. “There is more to it (psychologically) than just the warranty,” he said. “If you don’t offer it, buyers have almost a fear, that something is wrong, or being hidden. They associate the warranty as you putting your stamp of good faith on the property.”

A Home Warranty Protects the Real Estate Agent

Finally, including a home warranty on a home’s sale also protects a real estate agent. When selling a home, each Real Estate Brokerage must have Errors and Omissions Insurance, which will cover the brokerage and real estate agent if something has gone wrong while selling the home. Suzette Peoples, Broker for People’s Properties, said that most E and O insurance offers discounts for real estate brokerages who include home warranties with their sales.

Holmes said that this is because a home warranty provides an extra layer of protection for the buyer, and the insurance company recognizes that fact. “I think what that does is it shows that there’s something in place that will take care of the homeowner if something does go wrong. And then if the homeowner didn’t have that in place, they may be more likely to talk to the real estate agent,” Holmes said.

Have you used a home warranty? What has your experience been?

Featured photo credit: couple looking on house/luxorphoto via shutterstock.com

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Last Updated on January 26, 2021

Science Says A Glass Of Red Wine Can Replace 1 Hour Exercising

Science Says A Glass Of Red Wine Can Replace 1 Hour Exercising

Are you a red wine drinker? What if I tell you sipping in a glass of wine can equate to an hour of exercise? Yup, it’s tried and tested. A new scientific study has just confirmed this wonderful news. So next time you hold a glass of Merlot, you can brag about one hour of hard workout. Rejoice, drinkers!

What the study found out

“I think resveratrol could help patient populations who want to exercise but are physically incapable. Resveratrol could mimic exercise for the more improve the benefits of the modest amount of exercise that they can do.”

(applauds)

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I’m not saying this, but the study’s principal investigator Jason Dyck who got it published in the Journal of Physiology in May.

In a statement to ScienceDaily, Dyck pointed out that resveratrol is your magic “natural compound” which lavishes you with the same benefits as you would earn from working out in the gym.

And where do you find it? Fruits, nuts and of course, red wine!

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Did I forget to mention Dyck also researched resveratrol can “enhance exercise training and performance”?

There are limits, of course

But, all is not gold as they say. If you’re a lady who likes to flaunt holding a glass of white wine in the club or simply a Chardonnay-lover,you have a bad (sad) news. The “one hour workout” formula only works with red wine, not non red wines. And don’t be mistaken and think you’ve managed 4 to 6 hours of workout sessions if you happen to gulp down a bottle of red wine.

And what can replace the golden lifetime benefits of exercise?Exercise is just as important as you age. Period! But hey, don’t be discouraged; look at the bigger picture here. A glass of red wine is not a bad deal after all!

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The health benefits of red wine

But just how beneficial is the red alcoholic beverage to your body? As we all know red wine is a healthier choice youc an make when boozing.

Let’s hear it from a registered dietitian. Leah Kaufman lists red wine as the “most calorie friendly” alcoholic beverage. Sure, you won’t mind adding up to a mere 100 calories per 5-ounce glass of red wine after you realize it contains antioxidants, lowers risk of heart disease and stroke, reduces risk of diabetes-related diseases, helps avoid formation of blood clots and lowers bad cholesterol level.

Wantmore? Wine could also replace your mouthwash because the flavan-3-ols in red wines can control the “bad bacteria” in your mouth.To add to that list of benefits, moderate wine drinking may be beneficial for your eyes too – a recent study mentions.

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Be aware of the risks, too

Having mentioned all the ‘goods’ about red wine, you cannot underplay the fact that it is still an alcohol, which isn’t the best stuff to pour into your body. What is excessive drinking going to do to your body? Know the risks and you should be a good drinker at the end of the day.

However, you don’t want to discard the red vino from your “right eating”regimen just because it stains your teeth blue. M-o-d-e-r-a-t-i-o-n. Did you read that? That’s the operative word when it comes to booze.

By the way, when chocolate is paired with wine, particularly red, they can bring you some exceptional benefits towards your health.But again, if you tend to go overboard and booze down bottles after bottles, you are up for the negative side of alcohol, and we all know what too much of sweetness (sugar) can do to our body (open invitation to diabetes and heart diseases if you aren’t aware).

Folks, the red grape beverage is certainly a good buy to have a good hour’s worth of cardio, provided you keep the ‘M’ word in mind. Cheers!

Featured photo credit: James Palinsad via flickr.com

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