Does a Home Warranty increase property value?

For many people, buying a home is one among the most expensive acquisitions of their lifetime. As it is a costly acquisition, it involves the whole life’s savings of a person. It is quite natural that any homeowner will anticipate some extra protection. A home warranty is a form of service contract that is designed to provide homeowners with discounted replacement and repair services for domestic appliances. When coupled with a property sale, it has been well-known that homes sell quicker and at higher prices. Usually, homes with a home warranty plan will sell 10% quicker than those without the plan. Over the years, home warranty has become one among the reasons that home buyers keenly expect while they make an acquisition.

Types of home warranty in a home sale

In a home sale, three types of home service agreements are usually seen and they offer unique benefits. These include:

Seller Home Warranty: It is the home protection product that is acquired by the home seller during the time that the home sits in listing. It turns into effective once the payment is made and protects the home during the listing period. The warranty plan can be transferred to the home buyer once the transaction is made.

Buyer Conversion Warranty: This is a home protection plan, which is transferred to the home buyer. It comes into effect on the closing day.

Buyer Direct Warranty: This home warranty plan is purchased by the home buyer or his real estate mediator. It becomes effective on the closing day or it can be bought anytime within 90 days of the date of closing.

How a home can be sold lucratively with a home warranty?

Home warranty plans provide budget safety to the homeowner. When a home buyer makes an acquisition and gets a home warranty in conjunction with it, they also get some benefits that include:

  • Protection against unforeseen replacement and repairs expenses.
  • They will get repair services from skilled and qualified technicians if an appliance stops working.
  • They can avoid the necessity to seek a reliable service provider, as technicians are sent to their home.

If the points mentioned above are not compelling enough, here are the benefits that the home seller will get. These include:

  • Reasonably priced liability protection.
  • A home buyer will not bother the home seller if any appliances or systems in the home crash.
  • It boosts the value of the home as buyer feels secluded.
  • It avoids the necessity of chasing the home seller whenever damage occurs.

In some situations, real estate mediators regularly buy transferable home warranty plans for a home that is to be sold. Once the transaction is closed, the protection plan becomes effective, thus reducing the liabilities of the mediator.

Case in Point

From the points mentioned above, it is quite apparent that selling a home with a home warranty plan will benefit both home buyers and home sellers. Actually, when homes sold with a home warranty plan sell quicker in addition to being sold at elevated prices. Nothing good can come from putting yourself and the home buyer at inconvenience. Hence, a home warranty naturally boosts the value of the property.

Aaron Shaw
Meet the author

Aaron has been working in the home warranty industry since 2013. Nearing 10 years of experience, Aaron is incredibly knowledgable with everything home warranty.

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