A seller’s home warranty is a great asset, right? It can be – if buyers have the information they need to avoid potential pitfalls.
The picture-perfect idea:
A home warranty that covers the repair and replacement of any appliance or home system that fails from normal wear-and-tear.
It’s not all sunshine and daisies, however…
Most home warranties don’t cover “known conditions,” and though homeowner’s assume this means if they don’t know about the problem, it’s covered, that’s not always the case. This can result in a lot of unnecessary stress for your client – and you.
What do you “know”?
It’s all about detectability. Issues that could have been detected if buyers and agents properly completed two other “d” words: due diligence.
In English: Don’t cheap out on the home inspection. In most cases, if you’ve done your due diligence in scheduling a professional home inspection, any issues that arise which were not identified in the inspection will be covered by the warranty. If it was easily detectible and was missed because buyers skimped on the inspection and did not notice it themselves, they’re out of luck.
More tiny type
If, however, a problem IS detected on your home inspection, such as a recommended second opinion on a problem appliance, if said appliance is found in need of repairs prior to your purchase, this makes it – you guessed it – a known problem, which is then NOT covered.
Your seller’s home warranty is essentially insurance. If you tried to get auto insurance to fix a car that was already totaled, do you think the car insurance company will fix it for your measly $100 monthly payment and deductible? Nope. That is why only undetectable issues are covered.