Posted by Dawn Griffin
Home Warranties Are Back: What You Need to Know
David Specter from Choice Home Warranty (CHW) recently shared some valuable insights on home warranties (HW) that every real estate professional, home buyer, and home seller should know. In the recent highly competitive real estate market, home warranties were frequently waived. We are beginning to see a shift, and more agents are requesting them during inspection negotiations. This valuable product is making a comeback. Here’s an in-depth look at what was covered during his presentation.
Why Home Warranties Are Essential
Home warranties provide homeowners and buyers peace of mind by covering repairs and replacements for systems and appliances. They are particularly valuable during negotiations, allowing buyers to feel more secure in their purchase and offering sellers a competitive edge. Additionally, most home warranty programs offer free coverage to sellers during the listing period.
We have worked with several different home warranty companies. Having a local representative that can assist is a bonus. Below are some of the highlights of the Choice Home Warranty Plan as an example.
CHW Pricing Options
Choice Home Warranty offers three main plans to suit a range of needs:
1. Basic Plan – $450:
- Covers systems and appliances.
- Excludes washer/dryer and refrigerator.
2. Enhanced Plan – $580:
- Includes all systems and appliances.
- Adds coverage for washer/dryer, refrigerator, garage door (springs, hinges, remote), water heater sediment, faucets, showerheads, and haul-away services for old equipment.
3. Ultimate Plan – $660 (Highly Recommended):
- Comprehensive coverage for all systems and appliances.
- Includes AC compatibility, roof leaks, water softeners, and unlimited washers, dryers, microwaves, ovens, cooktops, ranges, and dishwashers.
- Covers necessary permits for replacements.
- Offers excellent value for older systems like R22 or R410A air conditioners.
Service Fee: $75 for all policies.
Key Policy Benefits
- Discounts:
- $35 discount for veterans, healthcare workers, and other service professionals.
- Multi-year discount: $1,010 for 26 months (compared to $660 for 13 months).
- Sellers can pay for a one-year plan, with buyers paying the $350 difference to extend it to two years.
- Re-Key Service:
- All plans include free re-keying for up to six doors and four keys, a cost-effective alternative to hiring a locksmith.
- Flexible Purchase Timeline:
- Buyers have up to two months after closing to purchase a plan at the realtor price.
Inspection Considerations
A thorough home inspection is vital to maximizing home warranty benefits. Here are some tips:
- Document Functionality: Ensure systems and appliances are documented as functional at the time of inspection. If they’re broken, ask the seller to repair them.
- Service Recommendations: If the inspection suggests cleaning or servicing, ensure this is completed. Having an invoice from the seller confirming functionality can increase the likelihood of coverage if issues arise later.
- On the Brink: For units near the end of their lifespan, consider negotiating for cleaning/service and a home warranty rather than a significant price reduction.
Unique CHW Features
- Recall Period:
- A 30-day recall period ensures repairs or replacements are readdressed if initial fixes don’t hold.
- Undetectable Pre-Existing Conditions:
- Covers issues that couldn’t be tested due to seasonal constraints, such as air conditioners during winter.
- Brand-Name Replacements:
- CHW replaces systems with equivalent brand-name models unless government standards require upgrades.
- Flexibility:
- If CHW cannot assign a company to a repair within two days, homeowners can hire their own contractor.
- High Coverage Limits:
- Up to $5,000 per trade/system annually, with no overall cap per year.
HVAC and Furnace Coverage
- HVAC:
- Seller listing coverage mirrors buyer coverage, though HVAC coverage requires an additional $60.
- HVAC listing coverage excludes undetectable pre-existing conditions.
- Furnace Repairs:
- Average turnaround is 2-4 business days.
- Not classified as an emergency service.
Additional Tips
- Air Conditioner Maintenance:
- Avoid power washing AC units to prevent damage.
- Check the data tag on outdoor condensers to determine compatibility with specific coverage levels.
- Inspection Documentation:
- Ensure all functionality or servicing is clearly documented. This paperwork can be crucial in securing warranty coverage for future issues.
Closing Thoughts
Home warranties are an invaluable tool for both buyers and sellers. They provide financial security, streamline negotiations, and enhance the overall homebuying experience. For further inquiries or assistance, contact David Specter at Choice Home Warranty or reach out to us.
