What's the difference between a buyer's and a seller's warranty?

Home Seller's Warranty

Now that the real estate market is cooling somewhat, you'll more likely to find your competitive home sellers offering a seller's warranty. But what exactly is a seller's warranty? How can a home warranty help sell your property?

In short, a seller's warranty provides added assurance that any repairs to major appliances, plumbing, and other home systems will be covered by the seller within a specified time period after the home is purchased, excluding a typical deductible of $35-60. Seller's warranties are always offered by builders of new homes, but they're becoming increasingly popular as sales tools for older homes, as well. For the seller, the cost is about $300-400, but it can be well worthwhile, especially if it means a quicker sale of their home.

There are some real estate companies that offer seller's warranties at no cost to their sellers during the home's listing period, such as Home Warranty of America, but the most agencies require their sellers to pay for the warranty if it's something they'd like to offer potential buyers--with the cost often built into the sales price.

Home Buyer's Warranty

A similar home warranty can be purchased by buyers, as well. The typical $300-400 cost is similar to what a seller would pay for similar coverage, and a buyer's warranty covers the same things as a seller's warranty. The main difference is that a buyer's warranty typically begins on the date of closing and continues for a one-year period after that. Another difference: the buyer's warranty can be renewed annually.

Besides Home Warranty of America, there are a number of other companies that offer home warranties for sellers and buyers. Those companies include: 2-10 Warranty, American Millennium (which offers a policy to specifically cover hidden structural or pest damage to a home), Ram Home Warranty, and Home Warranty Plans, but you'll probably find others if you do an Internet search or check with your local real estate broker.

As is the case with any consumer product or service, it's always wise to do some research before you decide whether a seller's or buyer's warranty is something you want to consider. Then, if you've decided that such a warranty is worthwhile in your particular situation, make sure to compare the various programs to see which ones are available in your area, what they specifically cover, their overall cost, the amount of their deductible, anything that might be excluded from the program, and any other variables before you commit. Remember, you can offer the warranty, but if you consider an offer less than full price, you can ask the buyers to provide their own warranty.

Typical Home Warranty's Standard Coverage Includes:

Built-in kitchen appliances: Dishwasher, Oven/Range/Cooktop, Microwave, Garbage disposal, Trash compactor, etc.

Central heater and ductwork

Plumbing system, water heater, drains

Electrical system and telephone wiring

Attic and exhaust fans

Limited pest control

Extended Coverage Available:

Limited roof repair

Central air conditioning

Washer/Dryer/Kitchen refrigerator

Well and septic systems

Pool equipment and/or Spa equipment including Solar

Save Money Buying Your Warranty

Shop online instead of ordering through your agent or escrow company. The major providers offer a discount price for orders placed online. You save the commission paid to a third party who normally arranges the policy.

Providing this service adds to your home's overall appeal to home shoppers. It protects the home buyers against unexpected breakdowns. who never worry about how much repairs will cost or who to call to fix a broken item. A home warranty gives your home buyers the peace of mind they seek.

Copyright (c) 2006 Jeanette J. Fisher