Home warranties can benefit many people, but home sellers, probably, win the most when using them. That’s because home buyers tend to find these plans very reassuring. This means that simply by having home warranty coverage for your home you are getting an advantage on a competitive real estate market. And if the market in your area isn’t “hot”, the warranty will be even more useful because it increases your chances of selling.
The efficiency of home warranties is such that homes with this plan sell for $2,300 more, on average. Note that the plan usually costs under $600, so you will win about $2,000 on this alone. Also, covered homes sell faster, which is the most important factor for many sellers.
Why Do Buyers Value Home Warranties?
Purchasing a home is a stressful experience and it’s not a surprise that buyers are looking for extra security when making this deal. Home warranty plans offer some measure of such security. In this case, they act as a supplement for home inspection, which is also an essential part of the home buying process.
When the home is covered by the warranty, the buyer is sure that even if some issue was missed in the inspection, they will be covered from the fallout. As buying a house is a major investment and money is sure to be tight for a few months afterward, this kind of protection does a lot to bring the new homeowners some peace of mind, especially when it has already been paid for.
That’s the leverage that a seller can use to attract more buyers or motivate them to take the deal or make a better offer. However, never forget that the prospective buyers are intelligent and will, most likely, research the plan covering the house thoroughly before they take it at face value.
If it doesn’t really have the buyer’s interests in mind, they might get offended and drop your property completely. Therefore, if you are going to increase the value of your home with a warranty, you need to choose one that’s truly valuable instead of buying the cheapest available plan.
How to Choose a Home Warranty Plan That Buyers Will Appreciate
When shopping for the best home warranty plan, you start by researching the options you have. There will be many because there are 50+ home warranty companies at the top of this industry. Each of them has some good offers, so you should study them all.
Also, as the industry is growing at a 3.1% rate, there are new companies appearing often. However, you should be very cautious of those because this industry is a fruitful ground for conmen.
Therefore, words “industry veteran” are one of the features you should look for when choosing a home warranty company. You can start looking for them through a simple Google search. However, you will be able to get more reliable information if you look up objective warranty companies’ reviews on specialized websites.
Shortlist the providers that seem the most trustworthy after your research and start looking into plans. Bear in mind that you are buying a home warranty for the buyer, so you should look for thing that they will be most interested in.
In this case, you should focus on plans that have extensive coverage for the most expensive appliances and home systems. These are the greatest vulnerabilities that make the buyers uneasy, so offering protection right away will be a great boon for you.
But note that the majority of home warranty companies only have a limited selection of plans. Many of them only have two or three packages, which means you won’t be able to get good enough coverage to make it valuable.
The good news is that the majority of companies also have an optional coverage feature. It allows you to include extra home systems, fixtures, and appliances to the basic plan. Each such addition will cost extra, but this is an investment into your future, so it’s definitely worth it.
Just be sure to choose the items for optional coverage carefully. The fact that you can include them doesn’t mean that you have to do this right away. Assess the condition of the items and remember that home warranty for old appliances is next to useless because the providers often deny claims for these.
Choosing a Home Warranty Plan When Selling a Home: Final Thoughts
You should use every edge you can when selling a home and home warranty can give you one. However, you also need to understand that this is a valuable tool that you should use wisely. Buying any cheap plan just to say that it’s there will be ineffective and might actually lose you prospective buyers.
Instead, do your best to find a plan with the best coverage for this home and customize it with optional coverage. You need to show off the fact that the plan brings good value in order for it to impress prospective buyers into buying faster.