Sellers: You Need a Home Warranty (and It Might Not Cost You a Dime)

First let me say that I am a born skeptic, and I am frugal. I NEVER buy the extended warranty when I buy a new appliance or other major purchase. In my mind I think that extended warranties are a scam and I would like to assume that the product that I am buying is well enough made that it should last for 3 years or so without me needing an expensive service call or a warranty to pay for the service call. Heck, I have a refrigerator in my basement that I think is about 15 years old and it runs just fine.

So, for me to state that sellers should have a home warranty seems a bit hypocritical. Yet I always offer them to my seller clients and I suggest that I place an order right when I take the listing. In my opinion, there really is no reason for a seller not to have a warranty. First of all, the warranty is free until closing. If its not negotiated in to the contract, you never pay for it. Second, the seller is covered for lots of things during the listing period, even without purchasing the warranty, and the all the seller pays is the deductible for the service call. Not bad, huh? 

And just so nobody thinks I am trying to scam the warranty company, our sales rep from the company is the one who sold me on this whole concept.

Last month we had a seller of a newer condo in Birmingham, Michigan whose stove stopped working the week that her condo went under contract. She was faced with getting the stove fixed or replacing it before close. Fortunately for her, we had ordered the warranty so she paid about $60 to have her stove fixed. Not bad. And if the problem had been worse, that would have been covered too.

On the other hand, I had a seller a year ago who told me he didn't want me to order the warranty because his home was in pristine shape.  The hot water heater died shortly in to the listing period.  He got to pay for a new one on his own.  Oh well.  I tried.  

The warranty can also help if there are negotiations after a home inspection. We sold a home last winter with some older appliances in it, and the buyers were comforted by knowing that a home warranty would take care of any breakdowns in their first year.

The verdict: a warranty warrants serious consideration. 

self portrait by Glutnix