A home is an investment. While you may not receive dividend checks, maximizing its value should be a priority. To protect the home’s value and increase it, consider investing in a home warranty. Why is a warranty important? How does it help safeguard your investment and allow you to see a greater return on this investment in the future?
Understanding the Purpose of a Home Warranty
When you buy a new appliance or vehicle, the seller might ask if you want a service contract. This contract will cover the cost of repairing or replacing the item you purchased if something goes wrong because of normal wear and tear. Insurance policies cover catastrophic damage, while service contracts cover damage resulting from normal use of the item. A home warranty is also a service contract. Rather than covering one item in the home though, the best home warranty coverage protects multiple appliances and systems.
The warranty term is one year and you may choose to renew the coverage. Unlike homeowner’s insurance, mortgage lenders don’t require a home warranty. However, it provides you with peace of mind and protection from costly repair bills.
Should You Buy a Transferrable Warranty?
Most home warranties can be transferred to a new owner. When a person sells their home, they can advertise the home warranty and increase interest in the property. Buyers appreciate knowing they are covered from unexpected repair bills after moving into the new residence and may pay more for a home with this protection. The warranty increases the property’s appeal in the buyer’s eyes.
When negotiating the sale price of a home, a buyer might ask that a warranty be purchased. They might make it a contingency of the offer or ask that the seller buy a warranty as part of the closing costs. Doing so guarantees the buyer is covered from the moment the sale is complete for the predetermined warranty term.
Renewing the Warranty
You may decide to let your warranty lapse as you haven’t used it or all appliances and systems have recently been repaired. It’s best to continue the coverage because you never know when something may go wrong. The cost of the warranty is significantly less than one major appliance or system repair. Imagine having to pay for multiple repairs in a short time. Warranty providers often offer discounts or incentives when the time comes to renew the policy, so be sure to ask if any are available.
Finding the Right Warranty
Talk with real estate professionals to see who they recommend for a home warranty. Another great resource when making this purchase is the repair technicians you already use. Ask if they work with any warranty providers, as choosing one of these providers will allow you to continue using companies you already trust. These individuals can share information about the companies, their terms, conditions, and coverage limits.
Never discount the importance of a home warranty. When you purchase this protection, you are safeguarding one of your biggest assets and helping maintain its value. Warranties can be purchased for existing homes and new builds, so learn more about what is available today. This is one purchase you won’t regret when you see how much it saves you on repair and replacement costs, often during the first year you have it.