This is a guest post from Jeff Hammerberg, the founder of GayRealEstate.com, the largest company in the nation representing the rights of queer home buyers and sellers. These are his words’¦

Home WarrantyHome Warranties: A potential benefit for both buyers and sellers alike.

The market for homes across the USA has never been more challenging for homeowners trying to sell, nor more mind-boggling for buyers shopping among the historically overwhelming inventory of discounted listings. At the same time, mortgage lenders are more stringent than ever due to painful losses due to delinquencies and foreclosures, so it is important to write purchase offers on houses that can hold up to mortgage company and appraiser scrutiny. But beyond the initial sale of a home, legitimate buyer concerns arise regarding the condition of the home – and whether it will continue to provide a problem-free experience after the keys change hands.

One resource to add to your credibility toolbox is a home warranty. While these insurance policies are often overlooked or underrated, they can easily pay for themselves by boosting confidence, ensuring quality, and calming the emotions of nervous and cost-conscious buyers.

The way a home warranty works is that it covers basic components of a home such as appliances and furnaces for a period of time, allowing the homeowner to market property with an added security blanket. Buyers get the assurance that things will work as they are supposed to, which can often make or break a fragile sales transaction. Many also cover your home the entire time you have it listed, so that last minute breakdowns don’t threaten to kill an otherwise flawless deal.

When moving into a new home most consumers are cash poor, thanks to an inordinate amount of expenses such as new furniture, interior decorating, and moving van costs. That fact is only intensified and accelerated by today’s high gas prices and fears of an economic recession, so sellers who offer a home warranty generally get a solid return on their investment by giving buyers a reliable and predictable outlook. That’s because if items that are covered need to be repaired or replaced during the warranty period it won’t add a financial burden.

The policies can be bought by the buyer or the seller, and sometimes are thrown in by real estate agents as an added bonus or housewarming present. Especially for sellers trying to market an older home in today’s highly competitive market, a home warranty can be an attractive yet affordable perk. Warranties are fairly inexpensive, typically ranging in price from $250 to $500, depending upon what is covered. It is also possible to find discounted policies when insurers offer specials, seasonal sales, or enhanced coverage for the “regular” price. Policy premiums are paid up front, and the period of coverage can run from a few months to more than a year, depending upon the specific terms and whether the holder decides to renew the policy or not. Homeowners making a claim may sometimes have to pay a service call fee, but those are usually nominal.

Details of the coverage are critical, and differ from policy to policy, so it is important to read the fine print and understand any and all restrictions. Whether or not the policy is transferable depends on the company, and this can be an important feature if you plan to sell and don’t want to remain responsible for handling potential claims.

Policies generally cover items including:

  • Air Conditioning and Heating Systems
  • Ductwork and Ceiling Fans
  • Dishwashers and Garbage Disposals
  • Doorbells and Telephone Wiring
  • Water Heaters and Plumbing Clogs Inside the Home
  • Electrical Systems
  • Cooking Ranges and Ovens

But warranties normally will not cover repairs of items outside, such as outdoor lights, sprinkler systems, garage door openers, hot tubs, and swimming pools. Individual policies may or may not cover washers, dryers, and refrigerators so it is important to read the actual policy carefully, not just the colorful marketing brochures. Sometimes you can add items that are generally excluded, by paying a little more and added extended coverage to the generic policy. In any case, as with any kind of insurance, your claim could be denied if you fail to follow proper building codes, perform routine maintenance, or use certified professionals to do your equipment installations.

One tip that may come in handy is that if you have a problem with a warranty that came through a real estate broker, you should complain to the insurer through the broker. Without the support of Realtors most home warranty companies stand to lose most of their customer base and core business. So the insurance company is probably going to take the complaint quite seriously and try to resolve the issue if it comes via a Realtor.

Insurance varies from state to state, so if you had a warranty in your former home but moved out of state, you will want to check your new policy to make sure it meets your needs. If you luck out it may include coverage you didn’t have at your former address.

For expert help with all your real estate needs contact www.GayRealEstate.com and www.GayMortgageLoans.com. The professionals in these networks are knowledgeable, experienced, and dedicated to the GLBT community. Or call toll free at 1-888-420-MOVE (6683).

More about Jeffery Hammerberg
Jeffery Hammerberg is Founder and President of Gay Real Estate, Inc. – the nation’s largest group of companies connecting gay & lesbian home buyers and sellers to gay, lesbian and gay friendly real estate agents. Since 1997, Hammerberg has created a virtual real estate marketplace for the LGBT community