A New Twist On Home Warranties

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August 9, 2016 by Jeff Lowen

Shake it, shake it, shake it, baby… Oh, sorry. Not that kind of twist! 🙂 If you’re a real estate agent, home warranties are simple and usually, most transactions have them. It’s relatively straight forward and great to have when you’re just moving into a new home.

However as a consumer, sometimes the benefits of a home warranty and how it will affect you can be vague at best. After all, it is just another insurance policy, right? homewarrantypic

Here are some tips that will clear the fog and offer a new twist on how to use them if you’re selling a home now, or in the near future.

  • Most home warranty companies offer coverage for the sellers while the property is listed at NO CHARGE to the seller. Ask them about Seller’s Coverage.
  • As a homeowner, if you don’t have a home warranty now, you can easily purchase one today. They are not just for when you buy or sell.
  • Ask if they will cover pre-existing issues.
  • Make sure you speak with the company’s representative to find out what is covered, what’s not, how much the deductible is, how they screen their contractors and what is the feedback process if you have something to say, positive or negative, about the service you’re getting.
  • Ask if they offer incentives for no claim periods.
  • Even if you are Joe Handyman and can fix everything in the house, what if the water heater blows, and needs replacing. Yeah, you can do it, but would you rather spend $500 on parts, and use up a Saturday afternoon instead of spending it with your family, or just throw down a $50 or $100 home warranty deductible and violá! Problem solved! Save your expertise for smaller, brownie-points with the spouse, jobs.
  • If you are selling your house…
    • Ask your favorite, recommended home warranty company about a multiple-year warranty.
    • Most will offer some break on the price for additional year warranty purchases.
    • Yes, it will cost you a little extra money, but in many transactions depending on the market and the type of financing the buyer has, the seller will end up contributing some dollar amount toward the buyers’ closing costs, anyway. Why can’t you have a say in what that’s spent on?
    • Your agent will love you, because if you’re paying for the warranty, then you should get to choose what company you use.
    • Your agent will love on you s’more, ’cause you’ll be the only home on the market that can advertise a 2, 3 or even 5-year warranty!
    • Buyers will appreciate the piece of mind from added security and your home could sell faster and for more money. Thereby, virtually paying for the money you spent on the warranty in the first place. Make sure your agent can negotiate well for you!!


Having a multi-year warranty is especially helpful if you’re selling in a market that has market pressure from new home builders offering 5 and 10-year warranties. These warranties are quite different from your home warranty, however as a buyer, the details are less important at first and just the fact that there is a “Warranty” on the home is huge!

According to homeadvisor.com, a contractor screening service, The cost of a plumber ranges from $160 to $430 for a typical job with the average cost per hour ranging from $45 to $150.

One of those during the course of a year and your warranty is paid for, right?

And incidentally, I do have a favorite home warranty company or two. One of which offers a 13-month warranty in a sea of annual policies. Hey, it’s a free month. Yet, there are many other factors to consider than just the cost. However, if you’re bent on cost you can expect to pay in the mid to high $300s on up to several hundred dollars for an annual policy. What’s the difference? Nothing, really. Just make sure to ask the above questions, regardless of what company you consider.

Side Note: I’ve read articles from some major news sources that claim home warranties will cover structural issues and the term of the warranty can be 10 years or longer. BE CAREFUL ABOUT THIS! I don’t know any home warranty companies that offer multi-year policies without asking them. Period. It’s not a single policy. It’s an annual policy that they renew and may be able to give you a break on the price if you pay upfront for more than one year. I’ve also talked to most of the larger companies and they may be able to offer 2, 3 or 4 years up front, but few like to do it. Home Warranty of America has been the most helpful in that arena ~ in my experience.

The structural issue? Each state has their requirements for insurances, but more often than not, any structural issue would be handled by your homeowner’s insurance and not your home warranty company. Just remember to ask.

Knowing all this going in, you’ll be able to make better decisions to maintenance your home and then market it when it’s time to sell.


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