Included By Whom??
“A Home Protection/Warranty Plan will be obtained by __ Buyer __ Seller.”
–Standard Minnesota Purchase Agreement, line 238.
One of my favorite 1960’s-era cartoons shows a gas station with a big sign in front promising “Free Mug with Fill.”
Down the street, the attendant (another anachronism) is chasing after a car that just filled up yelling, “Hey! Where’s my free mug?!?”
Role Reversal
How does that apply to today’s overheated housing market?
Instead of Sellers paying for a home warranty for Buyers — the norm in a more balanced market — at least some Buyers now are preemptively offering to foot the bill themselves.
How valuable a concession is that?
Tiebreaker
The cost is easy to quantify: the average home warranty policy is now about $500.
However, there’s a second, arguably bigger benefit for Sellers: such Buyers are at least implicitly signaling that the inspection phase of the deal will go (more) smoothly, because — even if the home is in a bit rougher condition — the Buyer’s post-closing downside risk is limited by the warranty coverage.
I don’t see Sellers being overly swayed by those considerations.
But, if there are multiple offers, they could easily be a tie-breaker . .
See also, “(Some) Buyers in Multiple Offers Pull Their Punches. Or Do They??”; and “Multiple Offer Tiebreakers.“
