Real estate agency introduces home buyers home warranty initiative

Vendors who list their properties through NSW agency Starr Partners will have the option of including a warranty to cover property and appliance repairs in the first 12 months of s sale.

The policy will cost $499, with vendors given the opportunity to opt in before settlement and transfer the warranty to the buyer’s name during settlement. Optional extras such as air conditoner and washing machine cover can be added at an additional cost.

Starr Partners is the first agency in Australia to offer this style of protection, which is already a $1.5 billion business in the US, according to Warranty Week.

The scheme is particurlar popular in the troubled California market, where buyers continue topurchase home warranties as part of existing home sales at a rate of approximately nine out of every 10 transactions.

Billy Jensen, president of the Home Warranty Association of California, attributes growth to the state’s home warranty industry to increased recognition that managing household expenses is paramount during a challenging economy.

Source: Warranty Week (US figures)

Starr Safeguard will cover a property’s major systems including electricals, plumbing, lock systems and minor roof damage as well as the major appliances (hot water system, stove, cooktop and dishwasher).

The launch of the cover follows a survey of 200 people by Starr Partners that found strong support for the concept.

Almost 90% of respondents said they were either concerned or very concerned about the ability to cover additional costs that might arise in your first year of ownership, and 97% said a warranty was either important or very important to making a purchase.

Nearly all respondents said a home warranty would be a benefit when buying a house.

Douglas Driscoll, Starr Partners CEO, says the warranty will fills the gap in the market. “Home and contents insurance can cover property damage due to flood or fire. Building inspections usually focus on the structure and building work. Starr Safeguard, on the other hand, covers single items that fail – for example, plumbing failures due to blockages by tree roots.”

Driscoll says vendors also benefit from home buyer cover giving buyers confidence and peace of mind that potential problems may be covered.

“It also covers the seller throughout the selling process. For instance, if a covered hot-water system blows just before the sale, Starr Safeguard will contribute to its repair or replacement,” he says.

Larry Schlesinger

Larry Schlesinger

Larry Schlesinger was a property writer at Property Observer

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