Why
A Home Warranty Should Be A Part Of Your Sale
A Home Warranty is basically an insurance policy. It insures
the mechanical, electrical and plumbing parts and systems
of a house. A Home Warranty provides the same comfort
as any insurance against unforeseeable events. Many homeowners
claim that their warranties have more than paid for themselves.
How Does It Work?
While each Home Warranty company operates a little differently,
there are some basics that apply. Each has a "basic"
plan that covers routine heating, plumbing and electrical
systems. In addition, they offer optional coverage
for air conditioning, pools and spas, appliances, etc.
charged on a per item basis. Some companies offer more
comprehensive "basic" plans that others, including
such features as irrigation systems and garage door openers.
A Home Warranty plan can be ordered at the time of listing
to protect the seller during the listing period, usually
not exceeding six (6) months, then assumed by the buyer
at the time of the sale. A Warranty may be purchased during
the escrow process, and some Home Warranty companies allow
the buyer to make the decision to have a plan after purchasing
the home.
The Process Step-By-Step
First application is completed and submitted to the Home
Warranty company, efther by phone or by fax. The application
should delineate which plan and options are being ordered,
and include the agent's and the property's information.
Some companies offer different plans depending on whether
it is for a listing ,or for a sale. For example, some
companies allow more options to the buyer at the time
of the sale then to the seller at the time of the listing.
There are companies that require a mechanical inspection
prior to approval of the application. It is considered
an advantage during your "walk through" to check
for any "red flags". In this case, a report
of the inspection is faxed to the ordering agent with
the results. Upon approval, the policy is in effect.
Depending on the company, when service is needed, the
policy holder may either call the warranty company and
provide their policy number and state the problems, then
wait for a call from an outside service company to arrange
for service. Or call their in-house service department
directly to arrange service.
At The Close of Escrow
Most Home Warranty plan payments are not due until the
close of escrow. At that time, a copy of the invoice,
listing the coverage ordered, is sent to the escrow company
for payment, along with an inspection report, if requested.
A copy of the policy is mailed to the new policy holder.
During the transit period, the policy is in effect.
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