What is a Home Warranty?
A home warranty is a contract between a buyer and a seller that provides financial protection against costly repairs and replacements for systems, appliances, and other components in the home. In real estate transactions, a home warranty can be particularly beneficial for buyers and sellers.
Benefits of Home Warranties in Real Estate
- Reduces Risk: A home warranty provides financial protection against costly repairs, reducing the risk for both buyers and sellers. This can be particularly beneficial during escrow or closing periods when unexpected expenses arise.
- Saves Time and Stress: By providing a safety net of coverage, home warranties can help alleviate stress and save time in resolving issues related to maintenance and repair.
- Increases Equity: A home warranty can increase the value of the property by providing peace of mind for buyers and sellers. This can be particularly beneficial if the buyer plans to stay in the property for an extended period or sell it in the future.
Additional Benefits
A home warranty can also provide additional benefits, including coverage for appliances, plumbing systems, and electrical components. In addition, many warranties offer 24/7 customer support and priority repair services.
- Covers System Repairs: A home warranty typically covers repairs to HVAC units, plumbing systems, and other major system components.
- Includes Electrical Components: Home warranties often cover electrical panel replacements, circuit breakers, and other electrical components.
- Servicing and Maintenance: Some warranties include 10% of the purchase price for servicing and maintenance services performed by licensed professionals.