Whether you’re buying or selling a home, a home warranty needs to be covered by the closing costs. But what is a home warranty? Who covers it? And do you need it? We’re about to give you the answer!
What is a home warranty?
A home warranty is a contract that protects your home’s appliances and systems like plumbing, electrical, HVAC, refrigerator and freezer, washer and dryer, and oven and stove. For those with pools or hot tubs, you can include add-on coverage for an extra amount. For a monthly or annual cost, a home warranty will repair or replace appliances that are malfunctioning or have broken down due to normal wear and tear. Contracts typically last one year and can be renewed.
Remember: a home warranty is not home insurance. Home insurance protects your home from damage due to accidents and natural disasters, but not normal wear and tear. That’s where the warranty comes in.
Do I need it for my Leander home?
Most real estate agents (and Mallach and Company included) recommend getting a home warranty with your home purchase. This way, the seller is protected from liability if applications break down after the home purchase. As a seller, we recommend having a home warranty to protect you after the real estate sale, and you can avoid any post-sale complications. This also makes your property easier to sell.
While it usually won’t cover the entire cost of replacing an appliance, it will help lower the cost depending on your warranty.
Who pays for it during a real estate transaction?
Sometimes home warranties are included in closing costs, but it varies from sale to sale. Sometimes buyers will ask the seller to pay for some or all of the closing costs. If that’s the case, the sellers are only responsible for those costs if they agree to these terms. The price ranges from $500 to $700 in Texas and is negotiable between buyers and sellers.
It’s worth noting that if the seller already has an existing home warranty, they can transfer it to the buyer.
If you need help deciding whether you need one, we can evaluate your home and appliances and let you know if a warranty will help your home sale! Contact us!
