I agree with many on here about the value of a home warranty. As a seller it helps prevent potential litigation down the road, gives buyer's peace of mind.
Last year, had a buyer who did not want to buy a home warranty and several months after they moved in they turned on the furnace only to find it had a cracked heat exchanger. Ouch! They were wishing they had purchased the warranty at that time.
However.... that does not mean you (the seller) needs to pay for it. I think it is about 50% right now who pays,buyers or sellers.With that said I guess the question is... are you willing to pay for it or do you feel that is an expense for the buyer to pay for it. I also agree with Rick that is can be used as a negotiating tool. It is usually not a deal breaker in most cases. It really depends on the funds the buyer has available and how much did they have to vary from the price they initially had expected.
I have to weigh in here. First time buyers LOVE the "peace of mind" they offer. If your house is less than $150,000, offer the warranty, but as a negotiating tool. When you counter the initial offer, remove the warranty, but offer to re-include it if they accept your price. This tactic has saved my sellers thousands over the years, as the buyer feels they "won" in the negotiations.
Aside - warranties have their place. They are like health insurance; lots of pre-existing condition exclusions but worth it if you use them one time. My 2 cents.
Broadly, I am not in favor of these or any extended warranties, with rare exception. The chances of you actually being covered is pretty slim. The best thing is a good inspection (and specialized sub inspections where applicable), to identify areas of risk and help you understand where and when you'll be spending money on normal maintenance or anticipated repairs.
Yes, for $75 or whatever, they'll come out and replace the furnace if it dies. Which, it probably won't. Or they'll replace the circuit board on the fridge. (Although, if it's under warranty, they might not). Which means that a $150 repair ended up costing $300.
So, you're essentially buying a $300 tranquilizer. I'm not a fan.
Given the cost for service which is now $60.per visit, I might as rolls the dice and take my chances that the product that I purchase will give me good sevice without AHS.
It all depends on the type of warranty you get and the cost of the warranty. If you do not get a home inspection then you may need a warranty because you dont know the condition of all the componets of the home. So many people skip getting a home inspection and learn later all the problems that were missed and issues they could of got fixed by the seller before they closed. The small fee for a home inspection is the key to knowing the in and out of the home you are buying.
Florida Certified Home Inspectors
We recommend to our sellers to accept and advertise the home warranty program but view it as a negotiations tool. Any offer that requires negotiations that takes you below your comfort level the seller has the option of dropping the home warranty program.
We view it as a very positive option for our customers tha allows them to advertise the home as covered by a warranty at potentially no expense to them if the do not get the offer price they desire.
I don't understand how this "product" can be sold as "insurance" / " warranty". As a real estate agent mentioned, I guess I'm the dishonest one trying to "scam" the poor company out of money. Please, give me a break, a business needs to follow through when a product is offered.
Keep in mind, this is just my story so far. I sure hope this isn't how home warranty's do business in general.
American Home Shield has excellent seller's coverage. For the price per day I don't think you can beat it.
If one thing goes wrong, and with listing times in some areas lasting more than three-six months, I recommend it.
My experience is that the fine print is to protect the company from individuals who try to take advantage of them. The local AHS rep is an important asset. Share your concerns with your Realtor. For honest people, I think if there is a "questionable" issue you will get a fair hearing. Their goal is not to sell you their policy...their goal is to get the policy included when the buyer buys the home.
In my opinion, moving is stressful enough. It is a win-win purchase, and relatively inexpensive.
The seller's coverage is a little bit different than the buyer's coverage as the kind of coverage you can purchase is more limited. The seller's coverage is purchased during the listing period, but you don't pay for it unless escrow closes. Thus, if the home never sells, you don't pay for the coverage even if the insurance paid out on a claim. Your agent should be able to put you in contact with the local AHS representative and you can ask all your questions about coverage and exceptions to coverage. You may also want to compare the coverage to that offered by other home warranty companies (First American, Old Republic, Fidelity National, to name just a few of the bigger companies). My last buyers chose First American because they also included pest coverage. I hope this helps you make an informed decision.
Great question. This is what i know about. a home warranty is like an insurance policy, there are covered incidents and not covered. I believe that there is a visit charge for a technician to come to the house but then the repair is free and if needed the replacement is also free. Does it cover major issues like heating, A/C, plumbing, electric , boiler, etc...? In the long run I guess it's mostley a good thing. Also it's a good incentive to transfer to the buyer so that they have a piece of mind for a full year after they move in.