A home protection plan, also known as a home warranty, is a special type of insurance policy that helps attract home buyers by offering protection to homeowners against major home system failures. Exactly what is covered will vary from one policy to the next, but studies consistently show that homes offered with such a plan sell faster and for more money than those homes listed without. That’s because home buyers like the comfort of knowing that if something should fail after the sale, they will most likely be protected from the associated costs by the home warranty.
Although all home warranty policies are different, most will cover plumbing, electrical systems, and heating. Appliances such as hot water heaters, ovens and refrigerators may also be included. If you would like other items covered, such as a washer or dryer, you may be required to pay a slightly higher premium. Typically, home systems and other appliances are not covered by a homeowner’s insurance policy, something that makes the home warranty even more appealing.
If you are considering including a home protection plan as part of your sale, read the policy carefully. Pay special attention to things like premiums and service charges. Once you have selected a policy, make the most of it. Mention it in newspaper ads, during a REALTOR® open house and put it on listing sheets at the open house. Used properly, the home protection plan can be a wonderful bargaining chip, something that can make your home more appealing than another home a buyer might be considering.