Now that homes are taking a little longer to sell there are also increases in buyer incentives to attract a buyer to consider one home over another. If you are a seller, what can you do to make your home more attractive than another similar home down the street? If your home is a resale product (not new construction) then you might consider a home warranty.
We discuss this with our clients prior to going on market and typically we offer the American Home Shield (AHS) 1-year warranty. In some markets around the country, like California, these policies are standard and required; in others they are not mandatory but might be de rigeur; and in Washington they are not required but their use is on the uptick. A few years ago you would hardly ever have seen them but now they cover almost 10% of the homes on the market.
For between $300-500 you can get a policy that covers most of the major systems of the house and since about 40% of all sales have something go wrong within the first 60 days of transfer of ownership it makes sense to consider paying for a policy at closing.
For Buyers, it might be a good thing if a policy isn’t already offered to either negotiate one into your deal or to just buy a policy at closing for yourself. Almost anyone can pay for the policy – the buyer, the seller or the agent. Usually what happens at closing, if it’s part of your transaction, is that the escrow company will pay the policy out of the closing funds as long as they have instructions to do so.
Depending on the area of the country you live in you might want added coverage above the basic policy. For instance, A/C is rarely covered here in Western WA because only about 8% of all homes on the West side of the Cascades have the systems installed. In Kansas, the majority of homes have some kind of A/C. Read the terms of coverage and costs involved and decide which policy is best for you.
