Home Protection Plan or Home Warranty Information for Home Buyers
If the Property is not already covered by a Residential Service Agreement, or home warranty program, then the Buyer can choose one of two options:
- that the Property not be covered by a Residential Service Agreement (frequently called a “home warranty” program or “home protection” plan)
- that the Property be covered by a Residential Service Agreement.
When the Buyer opts to include a Residential Service Agreement in the Contract, the Buyer must include an approximate dollar cost of the home warranty program along with a specific dollar amount to be paid by the Seller. The Contract specifically states that the Buyer agrees to pay the balance of the cost.
The Buyer does not have to name the provider of the Home Protection Plan in the Contract. However, the Buyer should make a decision about which provider to use once the Contract is executed so that the sales associate can place the order for the warranty prior to Closing.
BENEFITS OF A RESIDENTIAL SERVICE AGREEMENT
By covering major home systems and appliances, a Home Protection Plan can help make buying or selling a home a more rewarding experience.
Depending on the provider and the product, benefits of a Home Protection Plan typically include:
- Coverage for unexpected repair or replacement costs of many of your home’s major systems and appliances.
- Convenience with access to a network of local certified contractors through service representatives available 24 hours a day, 365 days per year.
- Budget protection by only paying a nominal service fee per trade call in most situations.