Why You Should Recommend Home Warranties to Clients

There is a lot of information out there about home warranties, and it’s not always easy for real estate agents to truly understand what it is and the value the warranties provide to everyone involved in a home purchase. The good news is that these products offer potentially significant protection should a mechanical failure occur with a home’s major systems or appliances before, during and after the real estate sales process begins.

Below are some basic facts that highlight why a home warranty can be so valuable:


Just like a warranty for your car, or an expensive piece of electronics, home warranties help buyers and sellers – or current homeowners – insulate themselves from financial risk if major systems or appliances in the house need to be repaired or replaced. An example would be if a system like your hot water heater, or an appliance like your dishwasher were to break down, home warranties help cover many of the repair or replacement costs associated with addressing the issue.


A homeowner can cover a house by purchasing a warranty at any time, and agents should consider kick starting that conversation before the sales or buying process even begins. Usually, these policies cost a few hundred dollars per year, depending upon the warranty plan that’s chosen, and typically cover any size home (some warranties have an additional charge for homes over 5000 sq. ft.).

As with some insurance policies, there is also a deductible associated with the warranty, which owners pay out of pocket, but these are often quite small compared with the premiums themselves, let alone the cost of repairing or replacing potentially major home systems.


Suppose a home covered by such a warranty experiences a mechanical failure to the furnace, the warranty may help to cover the costs. The provider will often have partnerships with repair companies that take care of the problem as needed, helping to ensure they get the best possible price. That, in turn, protects homeowners from having to pay potentially more than they otherwise would have if they’d called a technician and paid for repairs out of pocket.

Those partnerships are also important because warranty providers can help keep costs down with in-network providers.


The National Association of Realtors notes that the things individual warranties cover will be different based on the provider and other variables. Most basic plans, however, will take care of most expenses associated with repair or complete replacement for electrical, HVAC and plumbing systems, as well as some appliances. Some will also cover costs associated with repairs for private septic, well pumps, outside sewer lines, etc.., usually for a small additional fee.


Again, it’s a good idea for someone involved in a real estate sale to get the warranty squared away as soon as possible. Some sellers understand the value of a home warranty enrolled at the time list. Seller coverage gives them peace of mind during their listing and liability protection after the sale. Buyer plans are a valuable financial planning tool to protect buyers from costs associated with mechanical failures of major systems and appliances.

The more you can do to advise your clients of options available to them, the more likely clients are to come out of the process feeling good about the decisions they made. Jennifer Gagne

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