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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 July 8, 2020

18 Benefits of Journaling That Will Change Your Life

18 Benefits of Journaling That Will Change Your Life

The act of writing in a journal often seems daunting or unnecessary to many people. Even authors who work on novels might shun the idea of daily diaries. What purpose does jotting down words on a regular basis do if not contributing to the next novel, play or song? I know from experience many benefits of journaling that I wish to share.

1. Understand Yourself Better

Though many people and even writers avoid keeping journals, I vow to do it more often. Not only do I desire to take up daily journaling but also I plan to do it with pen to paper.

Some of the benefits I’ve found from my more active days include finding myself in the sense of understanding what matters to me and what I want out of life. I’ve been incredibly fortunate to find a spouse who is my best friend and advocate in raising children. I attribute this and much more to what I learned about myself in keeping journals for years.

2. Keep Track of Small Changes

I’ll admit that I never got very far with my guitar lessons, but in writing in a journal, I have seen the ability to track small changes like those that come when you practice anything.

Those learning a musical instrument often fail to see the small improvements that come with regular practice. Writing won’t help you switch chords any faster, but it will help you to develop a better sense for language and grammar just by doing it.

3. Become Aware of What Matters

As you continue to write in a journal, following a stream-of-consciousness feel, you can look back on the topics that you chose to write about. Those issues and emotions that poured out of you will provide insight on to what matters most to you.

You may not even realize that you’re job is depressing you or that you want to spend more time with your kids until you look over your thoughts that you weren’t really thinking about.

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4. Boost Creativity

The idea that the brain and its neural activity across hemispheres encourages learning also shows up in increased creativity. Just like with learning an instrument, your increased activity will inspire your thoughts to connect and reconnect in different ways.

When I wrote in a journal, I often wrote poetry as well as just my thoughts as they came out. I started to hear poems more in my mind; so much so that I took to scrawling lines on napkins and finding metaphors in mundane activities.

You really are what you do, so writing helps grow more than being a writer. Writing boosts the way you communicate and structure language, which really is a creative process.

5. Represents Your Emotions in a Safe Environment

A journal is as private as it gets. You can lock it in a safe or tuck it under a pillow and no one will accidentally share it on social media or have an opportunity to “leave a comment.”

Write about your sorrow as much as your happiness and frustration and know that you don’t have to keep your emotions inside your body. You can put them on paper.

6. Process Life Experiences

When you take the time to look back over what you’ve written, be it a week or a year later, you will have the distance you need to more objectively interpret your raw feelings.

Everything from losing a job to losing a loved one can emerge in a new light for a fresh perspective. Figuring out how the benefits of journaling affect your perspective on life will create connection and increase creativity.

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7. Stress Relief

In combining the exercise inherent in fine motor coordination that comes from the act of writing with the emotional release of self expression, those who maintain a journal relieve stress.

Try it out. Go home and write about your day. Write about the traffic. Write about the coffee order the barista got wrong but you didn’t have time to change. See how you can physically purge some of that pent-up stress by putting it on paper.

8. Provide Direction

Though journaling is often conducted as an activity without much direction, it often provides direction.

One of the biggest benefits of journaling is that your chaotic thoughts merge to show a direction in which to head. Asking the right questions is the only way to achieve the best solutions, so look to your journal to find your way toward your next goal.

9. Solve Problems

Just as in practicing math problems, we all get better at finding hidden solutions through the act of processing.

Think of your next goal as X and solve your life problems by reading your journals as word problems. The benefit of journaling here is that you write, explore and process to recognize and then solve problems.

When life is too in-your-face, you have to step back to see reality. Living in the moment allows us to write in the moment and use that expression to solve problems.

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10. Find Relief From Fighting

Solving your problems only comes after time to process, recognize and strategize. Just as in the benefit of journaling where relief comes from the act of writing, relief from fighting comes when you decide to “sit this one out” and communicate one-way.

Fighting is only productive when the fighters care to communicate and find common ground. When the emotions are as high as the stress levels, writing will function as the best time out.

11. Find Meaning in Life

Journaling will show you why you are living, whether you are wallowing in things you wish to change or striving to make the changes. Your life will begin to take on new meaning and your own words will reveal the actions that got you where you are so that you can assess and pave a new path for your future.

12. Allow Yourself to Focus

Taking even a small amount of time out of every day will provide you with not only peace of mind but also increased focus. Taking a break to meditate in writing and journaling will sharpen your mental faculties.

13. Sharpen Your Spirituality

When we write, we allow all the energy and experiences to flow through us, which often provides further insight into our own spirituality. Even if your parents didn’t raise you to follow a specific religion, your thoughts will start to show you what you believe about the universe and your place in it.

14. Let the Past Go

I’ve mentioned a few examples where going back over your writing offers advice and direction, but the simply truth is that writing down our feelings can be the best way to let them go. We can choose to literally throw these pages away when they’re filled with negativity and hate.

15. Allow Freedom

Journaling is the perfect way to not only express yourself but to also experience the freedom of being who you are. Your books can stay private or you can publish them. Your freedom stems from your sense of self and your perception of your thoughts.

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16. Enhance Your Career

Again, the private act of pen-to-paper processing provides the benefits of journaling mentioned above, but you can also enhance your career when you take similar ideas and categorize, edit and publish them in an online blog.

Your thoughts will often be personal and express emotions, but another benefit of journaling is uncovering fresh ideas about your work.

17. Literally Explore Your Dreams

All the benefits I’ve mentioned explore ideas, thoughts and emotions, which is also what our dreams and nightmares do. Through writing down your dreams from the previous night, you can enhance your creativity as well as connect some of the metaphorical dots from the rest of your journal.

18. Catalog Your Life for Others

No one wants to think about dying, but we all die. Leaving a journal will act as a way to reconnect with family and friends left behind. The ideas you wish to keep personal while you process the life you’re living will serve to rekindle and inspire those who loved you through the process.

We consider our partners our life witnesses, but writing provides a tangible mark on the world.

Now that you’ve learned all the benefits of journaling, it’s time to start writing a journal:

Featured photo credit: Kelly Sikkema via unsplash.com

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