Why offer a home warranty with your home?

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sahuarita-home-warrantyIt was spring of 2016. I got a panicked call from a listing client of ours.

This listing got a full price offer for $220,000 and it was to close in a week.

The seller, our client, did not want to do anything to loose the sale.

When they were moving out they realized the microwave stopped working.

The microwave was part of a matching set of high end stainless appliances and difficult to find.

There was no issue though. The seller had enrolled in a listing warranty.

The home warranty company rushed out and replaced the microwave for a $60 service call and saved the sale from falling through.

Why sell your home with a home warranty?

Well there is the obvious reason. That is to get repairs completed but home warranties do more than complete repairs. They help your home sell faster and for more money.

You ever consider buying new JUST because you do not have to worry about somebody else’s problems?

You are not alone.

All buyers have doubt when it comes to purchasing resale homes.

They wonder, will the hot water tank last?

What do I do if the air conditioner goes out?

They fear they could put their big down payment on the home and have no money left future repairs.

For these reasons a majority of home buyers request a home warranty.

You can purchase an aftermarket home warranty.

They cost in the vicinity of $500 per year and cover major appliances and various aspects of a home.

Then any repairs that come up can be done for the cost of a deductible of around $60.

I do not believe in warranties, why should I agree to one?

I am a fix it yourself kind of guy. When I started in real estate I did not see the value in warranties.

However, you have to put your buyer hat on.

What if somebody agreed to sell you their home, AND offered to fix anything that breaks for a year? Would you purchase their home or an identical home without a warranty?

This is the benefit of home warranties.

What do they cover?

They typically cover major appliances, plumbing, electrical, and mechanics of the home.

Each warranty varies so it is important you read the fine print.

Who pays for the warranty?

Many buyers are what we call payment rich and cash poor though. They can afford to finance your home but have very little cash for anything else.

For this reason, we see most buyers asking the seller pay for the home warranty out of the purchase price. This allows a buyer to finance the warranty without coming out of pocket.

Can I refuse to pay for the warranty?

Home warranties are completely negotiable. Either party can pay for the warranty.

If you refuse to pay for one then you eliminate a good part of the market who cannot afford to pay out of pocket for a warranty and cannot afford repairs in the near future.

Maybe you think you’re home is in great shape and nothing will ever break. That so, you never know, we are helping remove uncertainty from the buyer’s mind and uncertainty can kill your $250,000 sale in the blink of an eye over $500.


Our latest listing in Rancho Resort featuring a home warranty for the buyer.

Offering the warranty in your listing

Most home owners do not think to offer the warranty with their listing. Yet buyers request the they pay for the warranty.

We now advise all our sellers to list their home with a home warranty. When anybody offers on your home you provide them a home warranty at closing.

Make money by offering the warranty in your listing

You have to think of selling your home as a competition. This means your listing HAS to be better than the home down the street.

If you are offering a home warranty that means your home will sell before a similar home without a home warranty.

Buyer’s also pay for convenience and peace of mind, sometimes they pay MUCH more than the home warranty costs you.

The buyer always pays

One thing people forget is your listing is worth nothing. You have no money in your pocket. In fact you pay to sit in the home while it is listed on the market.

The buyer always comes to the table with the money.

So simply ask for more money. Not for them to pay for the warranty. You ask for enough proceeds to COVER the warranty.

$500 is NOTHING out of a $150,000 sale. We are talking about less than 1.0% of the sale proceeds.

Remove the warranty from the negotiation table by offering it in your listing. Then focus on bigger ticket items.

Ready to sell your home?

Sometimes warranty companies will offer you FREE or reduce price coverage during your listing period.

All you have to do is provide the buyer a home warranty when your home sells.

Of recent we have had a $800 microwave replaced, two dryers, two dishwashers, 3 air conditioners, and a fridge repaired.

All the our client’s paid was a $60 deductible.

How is that for peace of mind.

Drop us a line below and we will answer your questions about listing your home.