Educating homebuyers about the benefits of a Home Warranty Service Agreement
Many homebuyers know that a home warranty (also called a Systems and Appliances Home Warranty Service Agreement) can be a helpful tool to protect them against the unexpected. However, a large number of homebuyers don’t understand why they might need a Home Warranty Service Agreement, or what it covers.
As a trusted real estate professional it’s likely that you’ll be tasked with helping buyers understand Home Warranty Service Agreements. While you might be familiar with these products, your buyers might not be as savvy. Learn how to easily help homeowners understand how to use their Home Warranty Service Agreement so that they know exactly what is covered and what isn’t.
Explaining the value of a Home Warranty Service Agreement to buyers
Home Warranty Service Agreements are excellent tools that can cover the repair and replacement of certain systems and appliance failures that occur due to normal wear and tear. Each year, there’s a 68% chance that a major system or appliance within a home will fail, making a Home Warranty Service Agreement a smart choice when it comes to protecting a homeowner’s important investment. Share these statistics with your buyers. Not to frighten them, but to help them.
Ensure homeowners know the differences between Home Warranty Service Agreements and Homeowners Insurance
A common misconception among homeowners is that their Home Warranty Service Agreement and homeowners insurance policy are similar. Buyers need to understand that a Home Warranty Service Agreement doesn’t insure against losses, and that it only covers the specific systems and appliances listed in their agreement which fail due to normal wear and tear. Their home insurance policy kicks in after a theft, a large storm that causes damage to the home, a fire, and certain natural disasters. And, as you know, these policies are typically mandatory per the bank issuing the homeowner’s mortgage.
A Home Warranty Service Agreement covers important systems, like the Heating, Ventilation, and Air Conditioning (HVAC) system in a home, or major appliances like the refrigerator or oven. If one of the covered systems or appliances stops working the homeowner can use their Home Warranty Service Agreement to have an authorized, independent Service Contractor come to the home and diagnosis the failure. However, it’s important that buyers also understand the limitations of the Home Warranty Service Agreement.
Understanding what a Home Warranty Service Agreement covers
The most difficult part of helping buyers understand Home Warranty Service Agreements is explaining what is and isn’t covered. Homeowners are often disappointed when they learn that a breakdown in their home isn’t eligible for repair or replacement, but these misunderstandings can be avoided with a few simple steps:
- Encourage buyers to thoroughly read through their coverage documents. The Home Warranty Service Agreement will explain exactly which repairs and replacements are covered, and understanding the benefits and limitations will save buyers plenty of headaches in the long run.
- Before closing, review the buyer’s Home Warranty Service Agreement with them. It may seem redundant, but again, walking them through their coverage will ensure that they’re comfortable with their policy. Tell them how to place a service request and what to expect from the claims process, too.
Helping buyers understand Home Warranty Service Agreements truly is that simple—explain their coverage, review the benefits and limitations of the coverage before closing, and walk them through a typical claims process. If they have any additional questions, you can always direct them to the Home Warranty Service Agreement Provider. The company should have helpful staff on hand to expertly answer any questions or concerns.