Hello Valley Village neighbors and surrounding friends!
Let's talk about home warranties. If you've owned you home for decades or have been a long term renter, you've likely never had experience with home warranties. Did you know that the California Association of Realtors has the option for home warranty actually "baked in" to the purchase agreement? It's true! Let's dive into why you would want a home warranty included in the purchase of your next property.
If you’ve only ever rented before, the necessity of a home warranty may be unknown to you. As a renter, you are used to a landlord who will fix any issues you run into - but that all changes when you become a homeowner. Now, when a water heater breaks or the fridge starts to leak on the new floors in the kitchen, there is no landlord to call. So what do you do now? You may have a friend or family member who can handle the smaller fixes, but when it comes to the big issues that will end up emptying your pockets, a home warranty can save the day.
A home warranty is similar to insurance, as it covers some or all of the costs of replacements or repairs when a system in your home malfunctions or stops working altogether. They range in annual costs of $300-$900 and remove the middle man in the fixing process. Instead of finding someone to fix an issue, you will directly contact your warranty provider and they will set up the repair or replacement with the appropriate vendors. Your premium usually covers all costs, with the exception of a co-pay which is typically around $50.
If you’re wondering who should buy a warranty, they are usually recommended for home buyers. When you are used to having a landlord, a home warranty can fill that role in a different way. Home warranties are great for homes with both members in the work force outside of the house or just busy family members who can’t always be home to wait for the repair person window or find the time to even get quotes for the best repair shops in the area. Home warranties aren’t just for first time buyers. If your appliances are nearing the end of their life expectancy, now would be a great time to get a warranty. If all of your appliances were purchased in the same time frame, you don’t want to face the costs of them all failing at the same time. Warranties can save you time and money, especially in the first year of ownership.
Home warranties come into play during the home buying process by way of the Residential Purchase Agreement. In section 7.D.10 (pictured below), the RPA calls out the opportunity to have a home warranty included into the terms of the sale. It is a point of negotiation as to who will pay for that warranty, but it is customarily paid by the seller as a "peace of mind" policy, to help mitigate the potential for buyers to get litigious should a latent defect come to light after the close of the sale.
If the buyer chooses to waive their right to the inclusion of a home warranty, the box in 7.D.10 must be checked indicating so.
It is important to consider market conditions before including a request for a seller paid home warranty. I'd be happy to discuss this with you at greater length, based on your particular situation. As always, I'm here to help!
LUKE ALLEN
Realtor® - ABR® - ePRO® - SFR® - PSA®
Mobile: 310.497.7754
Email: luke.jonathan.allen@gmail.com
Website: LukeAllenRE.com
Facebook: facebook.com/LukeAllenRE/
Instagram: instagram.com/lukeallenre/
License#02059886
Coldwell Banker - Studio City
12930 Ventura Blvd.
Studio City, CA 91604
Referring me to your friends and family is the highest compliment you could give me!