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Why Smart Buyers and Sellers Want Home Warranties



Before purchasing a home today, most buyers have a home inspection. The inspector alerts them to issues he or she can see or determine through testing. The buyer and seller re-negotiate if the inspector notes that the roof, or the heating or cooling system, is of an age or condition where it might be expected to fail within a short time, or if there are structural or safety issues.


This inspection is a useful tool to prevent buyers from purchasing a “money pit” that might drain their resources in the coming years. But it can only go so far.


The fact is, the inspector cannot see and predict everything. The reason appliances are sold with a 1 year manufacturer's warranty is because sometimes even brand new equipment is faulty. There are things going on with the interior mechanism that neither a homeowner nor an inspector can see or anticipate.

In addition, many new homeowners exhaust their savings with the down payment. They aren’t financially prepared to meet the cost of replacing a major appliance. It makes sense to spend all you can on a down payment in order to get a better interest rate and a lower monthly payment, but that doesn’t leave an adequate cushion should a $6,000 repair suddenly be necessary.


Enter the home warranty. For an annual fee of a few hundred dollars, the homeowner's liability for the cost of repairs is limited to a fee of about $75 to $125 per incident. Compare that to a $6,000 AC replacement or an $800 water heater replacement and the value is clear.


For home buyers, purchasing a home warranty is an investment in peace of mind – knowing that if something unforeseen happens, they won't be going over their heads in credit card debt to handle it.


For home sellers including a prepaid home warranty in the sale is a good marketing move. It's a small thing that just might be the deciding factor in a choice between two homes. It’s also good insurance against the off chance that a buyer might come back and sue for damages, saying “You didn’t disclose…”


For my sellers who agree to include a prepaid warranty, I purchase seller's coverage for them as part of my service. That way, if something goes wrong while the home is on the market, they too benefit from the plan!


As always if we can be of service to you with you commercial, residential or investment needs, give us a call!



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TREC License 9004956

800 W Dallas Ave
McAllen Texas 78501

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