Homeownership brings a sense of security and comfort, but what happens to your home warranty when you sell your property?
Can it be transferred to the new owner?
These are common questions that arise during the home-selling process.
In this blog post, we’ll explore the facts surrounding the transferability of home warranties and provide you with the information you need to navigate this aspect of home ownership.
So, if you’re curious whether your home warranty can be passed on to the new owner, keep reading to find out.
When it comes to selling a home, one common question is whether the home warranty can be transferred to the new owner.
A home warranty provides financial protection and can help alleviate the cost of unexpected repairs or replacements.
When transferring a home warranty to a new owner, it is important to understand the terms and conditions outlined in the warranty agreement.
While some home warranties are transferable, allowing the new owner to assume coverage, others are non-transferable and only cover the original homeowner.
Whether or not a home warranty can be transferred to a new owner depends on the terms and conditions of the warranty agreement.
It is important for both buyers and sellers to thoroughly review the warranty agreement and consult with the warranty provider to understand the transferability options available.
What Are The Types OF Home Warranties Available?
Several types of home warranties are available on the market, each offering different levels of coverage and protection for homeowners.
Here are some common types of home warranties:
1. Appliance Warranty:
This type of warranty covers major appliances in your home, such as refrigerators, washers, dryers, and ovens.
It provides repair or replacement coverage if any of these appliances break down.
2. Systems Warranty:
This warranty covers essential systems in your home, including electrical, plumbing, heating, and cooling systems.
It offers protection against unexpected repair costs for this system.
3. Comprehensive Warranty:
Also known as a total home warranty, this type covers appliances and systems in your home.
It offers comprehensive protection and is often the most popular choice among homeowners.
4. New Construction Warranty:
Builders typically provide this warranty on newly constructed homes.
It covers any defects or issues with the home’s construction, giving homeowners peace of mind.
5. Extended Warranty:
Some home warranty companies offer extended warranties that provide coverage beyond the initial period.
This allows homeowners to enjoy protection for their appliances and systems after the standard warranty expires.
When choosing a home warranty, it is important to understand the specific coverage offered by each type and select the one that best meets your needs.
Does A Home Warranty Transfer To The New Owner?
A home warranty can transfer to the new owner when a property is sold.
However, there are some important considerations to keep in mind:
Transferability Clause:
Check the terms and conditions of the home warranty contract to see if it includes a transferability clause.
Some warranties may require a transfer fee or have specific requirements for the transfer to be valid.
Timing:
It is essential to initiate the transfer process once the home is sold.
Contact the home warranty company and provide the necessary details, such as the sale date, buyer’s information, and any applicable fees.
Pre-Existing Conditions:
Understand that pre-existing conditions may not be covered under the transferred warranty.
The new owner may need to wait for a specific period, typically 30–60 days, before filing a claim for these conditions.
Coverage Limitations:
Review the terms of the warranty to ensure that the coverage meets the new owner’s needs.
Consider any additional coverage options or upgrades to enhance protection.
Communication:
Openly communicate with the home warranty company, the seller, and the buyer to ensure a smooth transfer process and clarify any doubts or concerns.
Transferring a home warranty can provide assurance to the new owner and protect against unexpected expenses.
However, it is important to carefully review the terms and conditions of the warranty and follow the necessary steps for a successful transfer.
What Are The Factors That Affect Warranty Transfer?
Several factors can affect the transfer of a home warranty from one owner to another.
These factors may vary depending on the home warranty provider and the warranty contract terms.
Here are some common factors that can affect warranty transfer:
1. Warranty Provider:
Different home warranty providers may have different policies regarding warranty transfer.
Some providers may allow for easy warranty transfers, while others may require additional paperwork or fees.
2. Age Of Home:
The home’s age can impact the warranty’s transferability.
Some warranties may not be transferable if the home is too old, typically over ten years.
3. Proper Maintenance:
If the previous owner did not properly maintain the home or neglected the required repairs, it could affect the warranty transfer.
Some warranties may require proof of regular maintenance and repairs to be eligible for transfer.
4. Inspection And Evaluation:
Some warranty companies may require an inspection and evaluation of the home before transferring the warranty to ensure that no pre-existing conditions or issues could affect coverage.
5. Endorsements And Add-ons:
Any endorsements or add-ons to the original warranty may not be transferable, and the new owner may need to purchase them separately.
It’s important to review the specific terms and conditions of the home warranty contract and communicate with the provider to understand the factors that may affect warranty transfer.
How To Transfer Home Warranty Coverage?
Transferring home warranty coverage to a new owner is a straightforward process that typically involves the following steps:
Notify the home warranty company:
Once the home sale is complete, the seller or buyer should contact the home warranty company to inform them of the change in ownership.
Providing the necessary details, such as the new owner’s name and contact information, will help facilitate the transfer.
Review the warranty terms:
It’s important to read the warranty documentation to understand any specific requirements or limitations related to transferring coverage.
Some warranties may require a transfer fee or the completion of certain forms.
Provide necessary documentation:
The home warranty company may request documentation to verify the change in ownership, such as a copy of the purchase agreement or closing statement.
Be prepared to provide these documents promptly to avoid delays in the transfer process.
Update contact information:
Ensure the new owner’s contact information is updated in the home warranty company’s records.
This will ensure that future claims or service requests can be processed smoothly.
Familiarize the new owner with the warranty coverage:
Educating the new owner about the terms and coverage of the home warranty is essential.
Provide them with the necessary documentation and explain how to contact the warranty company for future claims or inquiries.
Transferring home warranty coverage is a simple process that helps protect the new owner from unexpected repair and replacement costs.
What Is The Difference Between Transferable vs. Non-Transferable Home Warranties?
When it comes to home warranties, there are two main types: transferable and non-transferable.
Here’s the difference between the two:
Transferable Home Warranties
Transferable home warranties can be transferred from the original homeowner to the new owner if the property is sold.
If you sell your home, the warranty can be passed on to the buyer, providing them coverage for certain systems and appliances.
The transfer process typically involves notifying the warranty company and paying a transfer fee.
Transferable warranties can be a valuable selling point for homeowners, offering potential buyers added peace of mind.
Non-Transferable Home Warranties
Non-transferable home warranties do not allow for the transfer of coverage to a new owner.
If you sell your home with a non-transferable warranty, the coverage will typically end once the property changes hands.
In this case, the new homeowner must purchase a separate warranty to cover their systems and appliances.
It’s important to review the terms and conditions of the home warranty policy to determine whether it is transferable or non-transferable before buying or selling a property.
What To Consider When Transferring Warranty Policies From Seller To Buyer?
When transferring a home warranty policy from the seller to the buyer, there are several factors to consider to ensure a smooth transfer process:
Read the terms and conditions of the home warranty policy carefully to understand the requirements and procedures for transferring the policy.
Check the validity of the warranty and ensure that it is still active and has not expired.
Review the policy’s coverage details and assess if it meets the new owner’s needs.
In some cases, transfer fees may be involved in transferring the warranty from the seller to the buyer.
Inquire about the claim history of the warranty policy.
By considering these factors, both the seller and the buyer can ensure a seamless transfer of the home warranty policy and provide valuable protection for the new homeowner.
What Are The Benefits Of Having A Home Warranty For Buyers And Sellers?
A home warranty can provide several benefits for buyers and sellers in a real estate transaction.
For Buyers:
1. Financial Protection: A home warranty can help protect buyers from unexpected repair costs for covered systems and appliances in the home.
In case of financial issues, you may also buy a new construction home with FHA loan.
Further, knowing about the closing costs that are tax deductible will be helpful for home buyers.
2. Peace of Mind: Knowing that a home warranty covers major systems and appliances can give buyers peace of mind, especially in older homes.
3. Simplified Maintenance: With a home warranty, buyers can easily place service requests for covered items, eliminating the hassle of finding and coordinating with individual contractors.
4. Budget Management: Buyers can plan their expenses more effectively by having predictable costs for covered repairs and replacements.
5. Added Value: A home warranty can increase the perceived value of a property, making it more appealing to potential buyers if the seller includes the warranty as part of the sale.
For Sellers:
1. Marketability: Including a home warranty in the sale can make the property more attractive to buyers, giving sellers a competitive edge.
2. Faster Sales: Homes with warranties sell faster, as buyers are more confident about the home’s condition.
3. Reduced Liability: A home warranty can help protect sellers from potential post-sale disputes over the condition and functionality of covered items.
4. Protection During The Listing Period: Sellers can benefit from warranty coverage for their use during the listing period, providing protection against unexpected repair costs.
5. Convenience: With a home warranty in place, sellers can avoid the need to negotiate repair requests during the transaction process.
Overall, a home warranty can provide peace of mind, financial protection, and convenience for buyers and sellers in a real estate transaction.
It is important for both parties to carefully review the terms and conditions of the warranty and understand the coverage and transferability options before making a decision.
Conclusion
In conclusion, whether a home warranty transfers to a new owner depends on several factors, including the type of warranty and the specific terms and conditions outlined in the contract.
Some home warranties are transferable, meaning they can be passed on to a new owner when the property is sold.
Others are non-transferable and only cover the original owner.
The transferability of a home warranty may be influenced by factors such as the warranty provider’s policies, state regulations, and any restrictions stated in the contract.
To transfer a home warranty to a new owner, both parties typically need to fill out a transfer form provided by the warranty company.
The new owner may also need to pay a transfer fee.
Buyers benefit from added protection against unexpected repairs and replacements, while sellers can attract potential buyers by offering a transferable warranty as part of the sales package.
Remember to carefully review the terms and conditions of your specific home warranty contract and consult with the warranty provider to understand the transferability and coverage details fully.
Related Blog: Do New Construction Homes Appraise Higher?
FAQs
Is Seller Warranty transferable?
The transferability of a seller warranty depends on the specific terms and conditions of the home warranty provider.
Once you have confirmed the warranty’s transferability, inform the new owner about the warranty coverage and provide them with the necessary information to initiate the transfer.
It is essential to thoroughly review the warranty contract and communicate with the warranty provider to understand the specific terms and conditions regarding the transferability of the seller’s warranty.
How Long Is A Home Warranty Valid?
A home warranty is typically valid for a specific period, which can vary depending on the provider and the type of coverage.
Remember to read the terms and conditions of the home warranty policy to understand the specific coverage details and limitations.
Who Owns The Home Warranty?
In most cases, the homeowner or the seller owns the home warranty.
The homeowner typically purchases it to cover specific appliances, systems, or home components.
However, there are instances where the home warranty may be included as part of the sale of the property or negotiated between the buyer and the seller.