As home price rebound in a recovering housing economy, more sellers are purchasing extended home warranties (also called service contracts) to give themselves a competitive edge.
“Securing your home with an extended warranty is a great way to set yourself apart from other sellers,” said Tim Meenan, Executive Director of the Service Contract Industry Council. “Buyers seek out homes that are covered by an extended warranty because it can potentially save them thousands of dollars in post-sale home repairs.”
For the first time in seven years, a majority of the markets covered by realtor.com have switched from buyers’ to sellers’ markets. Sellers in many markets are receiving multiple bids, and bidding wars have broken out in the hottest areas. Rising prices are being driven my low inventories which have reached levels 20 or 30 percent lower than they were a year ago.
Despite the competition among buyers, many sellers are finding they can command even higher prices by buying a home warranty which is transferable to the new owner.
A typical home warranty is a one-year contract that protects a homebuyer or current homeowner against the cost of unexpected repairs or replacement of major systems and appliances that breakdown due to normal usage or defects in materials or workmanship. Home warranties can be purchased at any time from realtors, builders and independent providers.
Coverage begins 30 days after enrollment and receipt of applicable contract fees and continues for 365 from start date. If you are able to provide proof of prior coverage through another warranty carrier, showing no lapse of warranty coverage, according to Choice Home Warranty, all of whose warranties are 100 percent transferable for consumers who opt to choose your home warranty.