Even in a Seller’s Market, the Value of a Home Service Contract Remains Strong

 

Lenexa, KS – When sales in the residential real estate market grow, often resulting in a shift towards a sellers’ market in many areas, no one should forget the basic economics of selling or owning a home. The National Home Service Contract Association reminds home buyers that the true cost of home ownership extends well beyond the sale price.

A home service contract provides needed peace of mind and budget protection at a time when they need it most, during the first year of home ownership. They also protect the seller and the seller’s agent from an unhappy and frustrated buyer who encounters a significant repair right after closing.

Home service contracts generally provide service, repair or replacement for items such as dishwashers, ovens, disposers, electrical and plumbing systems and most importantly, heating, ventilation and air conditioning systems (HVAC), which may become inoperable due to normal wear and use. Coverage does not include preexisting conditions. At an average cost of $400 – $550 a year and service calls ranging from $50-$100, a home service contract can easily pay for itself with just one use, and is one reason they are highly recommended by real estate brokers for both the seller and buyer of a home.

There are many ‘unexpected’ expenses that add to the cost of home ownership – especially during the first year according to national data and the NHSCA.  Jeff Powell, President of First American Home Protections says “We all love those ‘do it yourself’ television shows but the reality is that there are many home repair or replacement projects that occur in that first year which can, and should, only be done by a skilled professional. The true cost of owning a home includes items such as maintenance and repair. The average cost for those items in the first year of home ownership is roughly 1% to 2% of the purchase price. That can really cause a burden to homeowners who have just made what is likely the biggest purchase of their life. That is where a home service contract can really protect a homeowner’s bank account and provide peace of mind.”

The national median existing single-family home price for the first quarter of 2016 was $234,000. That translates to potential maintenance and repair bills ranging from $2340 to $4680 and higher. That figure is for maintenance and repair alone, and doesn’t even include items such as a major system replacement, insurance, property taxes, utilities, lawn care, pest control, or the purchase of new items such as furniture. 

“Even in a sellers’ market, home sellers still can set their home apart from the rest by providing such coverage,” Powell said. “And home buyers still need and want to safeguard their budget. Why leave anything to chance when it’s a win-win for all parties involved?”

The National Home Service Contract Association (NHSCA) is a non-profit 501(c) (6) industry trade organization of member companies serving home service contract providers and consumer interests throughout the United States. For more great industry, media and consumer information, visit  http://www.homeservicecontract.org or call 913-871-5600.

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COLD TEMPS NOT OPTIMAL FOR HVAC TESTING

 

National Home Service Contract Association cautions home buyers about limitations on HVAC testing in colder temperatures

Lenexa, KS – The National Home Service Contract Association is cautions consumers purchasing an existing home in the winter that colder temps make it difficult to determine the proper function of residential air conditioning units.

HVAC professionals generally caution that anytime the mercury falls below 65 degrees Fahrenheit, a home inspection report can only verify that a unit will turn on, but cannot verify it actually cools without high risk of severely damaging the compressor.  In winter, the coldest spot in a refrigeration circuit is in the compressor crankcase, located outside the home. Because refrigerant naturally migrates to the coldest spot in the unit, if the system is tested, the refrigerant may travel into the compressor, causing damage.

The NHSCA urges buyers purchasing an existing home to hire a qualified and experienced home inspector, pay special attention to the testing of their HVAC unit and request the seller provide a home service contract as part of the real estate transaction to help insulate them from costly repair or replacement costs of for undetected problems in future months.

To offer reassurance that the system is operating properly, real estate agents representing the buyer will generally ask the seller to sign a form stating the date of the last time the air conditioning system was fully functioning. However, if a home has been on the market for an extended period of time, this statement may not provide accurate information on the current condition of the unit.

“If a house has been sitting empty and an undetected leak has slowly depleted the refrigerant, the new owner will have no idea until they turn the air conditioning on in the summer,” says Art Chartrand Executive Director of the NHSCA. “At that point, a service call to get the refrigerant level back up and the unit running will likely cost in excess of the cost of an annual home service contract on the entire home. “  One also need to understand that low levels freon would indicate a leak in the line that will continue to deplete refrigerant until it is located and fixed. That translates into more repair dollars for the homeowner.

The NHSCA also notes that in the past some homeowners have opted for a temporary fix by simply having refrigerant added to their systems to keep them operational. However, the dramatic increase in the cost of refrigerant in recent years can make this approach as costly as a repair. Freon is currently scheduled by the EPA to be unavailable after 2020 due to its adverse environmental concerns.

Home service contracts generally provide service, repair or replacement for items such as dishwashers, ovens, disposers, electrical and plumbing systems – and most importantly, heating, ventilation and air conditioning systems (HVAC), but do not cover pre-existing conditions. Paying particular attention to the contract’s terms and conditions can help avoid confusion when a service call is needed.

The National Home Service Contract Association (NHSCA) is a non-profit 501(c) (6) industry trade organization of member companies serving home service contract providers and consumer interests throughout the United States. For more great industry, media and consumer information, visit  http://www.homeservicecontract.org or call 913-871-5600.

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