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The Importance of Setting Expectations About a Home Warranty Service Agreement | 2-10 HBW


Providing a buyer with a Home Warranty Service Agreement at closing is a great way to ensure their home’s major systems and appliances are protected. From the buyer’s perspective, they’re going into the home thinking that everything is covered on their systems and appliances. However, not all coverage is the same and a homeowner could have different expectations as to what a Service Agreement covers. This could range from major plumbing issues to a broken garage door. Real estate agents have a great opportunity to review the coverage with the homeowner to ensure they understand what they’re getting, which is beneficial for several reasons.

  1. Unnecessary post-closing disputes, meaning that the buyer is less likely to go after the seller and real estate agent.
  2. Homeowners will be less likely to get frustrated with the warranty company over non-covered breakdowns.
  3. Saves the homeowner the cost of a service fee for non-eligible breakdowns.

What can real estate agents do to help a homeowner understand their Service Agreement? For starters, it’s a great idea to ensure they have a thorough understanding of the coverage themselves. They can do this by having their local warranty company’s representative schedule time with them personally or their entire office for a warranty 101 class.

Once the real estate agent has a greater understanding, offering to do a walk through of the house with the buyer to review coverage can be helpful as most people learn visually. Or it can be done simply by walking through each covered item listed on the Service Agreement while pointing out limits and exclusions. The Home Warranty Service Agreement may also offer additional coverage options that can be added for a minimal cost such as pool/spa, roof leak repairs and additional refrigerators.

Understandably, one of the biggest frustrations homeowners have is the denial of a service request. Real estate agents can limit this frustration by helping to set the right expectation at closing for what a Service Agreement covers.