When a buyer wants to buy your home, they are spending a lot of money to convince you that they are the right ones for the deed. However, after closing costs and a large down payment, it's no wonder that buyers are skeptical of signing on the dotted line. Though, if you have a home warranty in place, you might be increasing the likelihood of your home selling, even if the price is higher than the buyer would prefer. Home warranties can help sell your home; here's how.



What a Home Warranty Is

For those who have only heard about a home warranty, it's time to learn the basics. A home warranty is an insurance plan that covers the repairs and replacement of appliances that are in your home, such as the refrigerator and stove, the electrical system and plumbing system. If these appliances and systems should break down during the ownership of the home, they can be repaired or replaced for a small fee. The annual cost of this kind of home warranty plan can vary, but it's typically around $400 a year - a reasonable price, given the coverage.

What You Need to Keep in Mind with Home Warranties

However, a home warranty isn't going to save the buyer in every case. If you have the home inspection ahead of time and it's noted that there are problems in the plumbing or electrical wiring, those areas will need to be fixed at full price. Those repairs will not be covered until a new home warranty is approved. The new buyer in accordance with their particular insurance can deem those repairs a 'pre existing' condition, just as a healthy insurance company might do the same when you are applying for a new policy.

The repairs and replacements will also have limited terms, so that's something to keep in mind when choosing the best policy. Some warranties will not cover basic service calls, though they will cover repairs that are directly related to the problems. It's a fine line, so be sure to read the terms of the warranty carefully before choosing the right one.

Why Buyers Love Home Warranties

These home warranties give new buyers a sense of peace when they buy a new home. Due to the fact that, in most cases, any problems that arise will be able to be fixed, there is less worry they will need to spend a lot of money when they are first settling into their new home. Instead of spending thousands of dollars, the new owner can focus on other important costs.

As a seller, you can purchase the home warranty while you are selling the home and then transfer this warranty to the buyer when the sale is complete. This provides an additional benefit to the buyer without their having to deal with buying the warranty on their own.

Of course, you will also want to make repairs and do general fixes before you put the house on the market. This will help create the right impression with the buyer in the first place, but the home warranty can turn their head and make them come in for a second look.

With the competitive housing market right now, any little thing can make the difference between a sale and a home that sits on the market for months. To help increase the odds of your home being sold, why not add a home warranty to the deal? In addition to a fresh coat of paint, your home is going to stand out from the rest as the one that should be bought by that seller.