Received our first offer -- input needed on home warranty

PipdogNovember 5, 2013

Today we received our first offer. The buyer wants the furniture (which we were afraid of) but he did not itemize which items are included in his offer. We are going to try to counter and then separately negotiate the furniture.

The buyer has requested in the offer that we provide a home warranty "not to exceed $1,000". That seems very high -- I can't find our offer to buy our house, but I think we paid around $500.

What's the going rate for a home warranty policy?

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weedyacres

We just paid $520 for one. Ask your agent; they should have pricing available. I'd counter back with a specific policy from a specific company with a specific price.

Congrats on the offer!

    Bookmark   November 5, 2013 at 4:25PM
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barbcollins

"not to exceed $1,000".

Doesn't that mean you don't have to pay more than $1,000?

So you could pay $500.00

    Bookmark   November 5, 2013 at 6:49PM
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chispa

The realtor we used as our buyer's agent purchases a policy for her customers. I think it was under $500. It came in handy when the Thermador microwave in the 3-in-1 micro-warming drawer-oven stopped working 2 months after we moved in. It took several service calls to fix properly, but they figured it out eventually!

    Bookmark   November 6, 2013 at 1:40AM
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Pipdog

thanks, weedy, chispa and barb. I think we'd rather have a provision that the policy not exceed $500 as opposed to $1,000 because the buyers could insist on one that was $1,000 or just under. They have added in extras for the policy some of which aren't typically covered in your basic home warranty policy.

Personally, my experience with home warranty policies was less than desirable -- they did not cover a basic plumbing issue we encountered during the first year we lived here. I spent about 10 hours on the phone with the warranty coverage and we ended up having to pay out of our own pockets because they said it was a pre-existing condition and excluded from coverage. I'm not thrilled about the idea of shelling out $1000 to these companies but certainly don't want this to kill the deal. Maybe I will ask my agent if she can pitch in here.

    Bookmark   November 6, 2013 at 11:26AM
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nancylouise_gw

Home warranties are not worth the paper they are written on. the way that the home "warranty" companies make you jump through hoops to meet their standards is a sham. But you don't want to loose a buyer over $500. Do have your agent chip in or buy one for you. Did the buyers give you an itemized list of the furniture that they wanted to purchase? Or did it just say they wanted the furniture included. I would spell out precisely what they are getting. NancyLouise

    Bookmark   November 6, 2013 at 1:29PM
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ncrealestateguy

Definitely itemize the personal property on a separate Bill of Sale. Not on the contract.
$500 is reasonable for a HOW.
Don't involve your agent with chipping in. Especially before you counter with the $500. It is tacky, IMO.

    Bookmark   November 6, 2013 at 1:39PM
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sylviatexas1

That $1000 warranty request may be a red herring to get seller's focus off the *big* stuff, or it may be a greedy buyer who has unreasonable expectations of how much he can squeeze out of a seller.

For $1000, a buyer can load up a *service agreement* (these things aren't warranties, since they don't warrant anything, they just provide for repair or replacement of non-functioning systems & appliances at builder grade) with all kinds of coverages that drive up the cost & don't add much value.

You can add fridges, washing machines, clothes dryers, etc, but the fees for adding them are high in relation to the amount the buyer would get for the appliance, so people usually don't ask for or offer those coverages.

& ncreguy has a point:
asking *your* agent to 'chip in' to appease a greedy buyer is tacky...
plus it means that you aren't doing your 'seller's job' of working out the negotiations,
plus it's counter-productive.

The more you appease a buyer on something like this, the harder a position the buyer (in my experience) is likely to take.

If things struggle to an impasse & any agent needs to 'chip in', let the buyer's agent think about that.

I wish you the best.

    Bookmark   November 6, 2013 at 2:14PM
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chispa

Do agents get a better price on a home warranty when they buy from the same company and have the purchasing power/volume of a large company like Caldewell Banker?

When we had issues with our repairs, our buyer's agent got in touch with her rep at the home warranty company and easily escalated the problem for us.

This post was edited by chispa on Wed, Nov 6, 13 at 18:40

    Bookmark   November 6, 2013 at 6:37PM
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ncrealestateguy

Not me. The price is the price.

    Bookmark   November 7, 2013 at 7:45AM
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gyr_falcon

I was on the other side during our house purchase. We had agreed on the price for the house, and the seller then offered a $450 home warranty, too. We told him to just save his money, because IOP making a claim would be more hassle than it was worth.

    Bookmark   November 8, 2013 at 12:59PM
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sylviatexas1

don't know about other places, but here, some of the big firms get a credit or the agents get a credit that goes toward their office fees if they order a warranty from a company with which the real estate agency has a 'trade partner' or 'business partner' agreement.

I once worked for one of those agencies, won't do it again.

& I'd always encourage a buyer to take the warranty if it's offered;
you just never know when a central air or heating system is going to grind to a halt.

    Bookmark   November 8, 2013 at 6:13PM
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gyr_falcon

How many times have we read "They fixed it, but they had to come out x number of times to get it working correctly?" Frankly, if my heating system or AC breaks down, I don't want whichever repair person the warranty company decides to hire fiddling with it. I want qualified people I can trust.

    Bookmark   November 9, 2013 at 4:11PM
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sylviatexas1

I know these companies are sometimes hard to deal with;
here in Texas, we have to convince them over & over that a non-functioning air conditioner in August *is* a life-&-death matter!

The way the service contract companies make a profit is by replacing damaged items with builder grade & by using contractors who will work for less as long as they get the volume.

They also try to repair things rather than replace them;
for instance, a contractor called in by the homeowner would try to replace an entire air conditioning unit, because he makes more money that way, while the service company's contractor has to try to get it to work by doing the least expensive thing *first*.

If you can afford to replace things regardless of cost, obviously it's much easier & less stressful & more happy-making, but the service contracts filll a real need by cushioning the financial blow if/when an appliance or system breaks down.

    Bookmark   November 10, 2013 at 4:54PM
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