So long as your covered home is sold during the term stated in your home warranty contract, you can transfer your home warranty policy to a home buyer quite easily. This is usually done via phone call — where you can request a change in ownership and submit the information required on the new homeowner.
This particular feature is something that is a must for many home sellers that are interested in selling their home quickly. This is especially true for those who want to sell older homes — which might require more home repairs and replacements.
The home warranty policy, in this case, acts as an extra incentive that often persuades buyers to buy the property more quickly — at least 16% faster than homes without home warranties, to be specific! It’s important to note that homes with home warranty policies also tend to sell more than homes without, at least $2,500 more, according to the Service Contract Industry Council.
Learn more about home warranty policies and standard transferring regulations below:
What is a Home Warranty?
As a quick review, a home warranty policy is a service agreement. It works a bit like a home insurance policy, except that it specifically covers appliances and home systems. That means that you’re paying for the protection of your refrigerator, your heating systems, your plumbing systems, your pool, your kitchen appliances, etc.
Most home warranty companies, like Total Home Protection, will charge you an average of $300-650 per year for your coverage. With a standard deductible fee of around $50-100 that you must pay every time a covered item in your home needs to be fixed or repaired.
As mentioned, it’s an attractive option for home sellers because it acts as an incentive for homebuyers to buy quicker. And, it can be transferred at any time before the closing date of your contract to another person with just a simple phone call. More on this below:
HOME SELLER: Transferring Your Home Warranty Policy
Say you’ve just closed a sale, what do you need to do next to make sure that your home warranty policy is transferred?
Well, it really depends on the home warranty company that you’ve signed up with. But, in the case of most home warranties, like Total Home Protection, all that is required of you is to call them at their toll-free number and notify them of the change of ownership.
According to Total Home Protection, “…there is no fee to transfer your home warranty.” So, you can do it for free. Just call, give them the new owner’s information, and the policy is theirs. Simple as that. Now, on the opposite side of the fence, as in, if you’re the home buyer, the following is what you should expect once the policy has been transferred:
HOME BUYER: Claiming Your New Home Warranty Policy
Once the ownership of the home warranty contract has been passed to you, it is your responsibility, as the new homeowner, to pay your dues when the time of the contract’s renewal date arrives. However, until then, you can enjoy some peace of mind knowing, that if any of the covered appliances or systems in your home breaks down, that you will be protected.
Furthermore, there are home warranty providers that will allow you to cancel your current contract, and use the money refunded to purchase a new home warranty plan for your home. So, if you find yourself wanting to work with a different company or forego the plan altogether, you can do so very easily! Just like with the request of transfer, cancellations start by simply calling your home warranty provider to request the change.
Although, it should be pointed out that most home warranty companies do have cancellation fees (which cost around $50-75 on average.) So, even if you do get refunded for your months of unclaimed protection, you will still end up losing some money by canceling.
Final Thoughts: How to Transfer Home Warranty Policy from Home Seller to Home Buyer
It really isn’t as complicated as it seems! In fact, it was made to be very simple so that the transfer between the home seller to the home buyer is as painless as possible.
You shouldn’t expect any difficulties along the way, especially if you work with a home warranty company that’s known for their excellent customer service abilities, a good example of which is Total Home Protection. And, of course! If you’re still worried, the help you need is but a phone call away! Even if you’ve not closed the sale on your home yet, you can always discuss the process of transferring home warranty policies over with your provider of choice to familiarize yourself with their specific transfer processing system.
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