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Does your home insurance policy include things like plumbing or electricity failures?

It most likely doesn't. What will you do if something goes wrong in the home after you've successfully closed the deal?

Even worse, what if something goes wrong after the buyer has already moved in? You could end up paying thousands of dollars to have the problem fixed.

Follow these tips to help you when you are buying a house:

Don't think that just because ownership of the property has transferred from you to buyer that the buyer won't come to you if there is a major home failure. Imagine if your brand new vehicle malfunctioned within days of its purchase. Would you pay for repairs without word to the dealer? Of course, you wouldn't. Neither will your buyer if there is a problem with the home after closing.

As a for sale by owner home seller, you can benefit from the purchase of a seller's home warranty. Not only will it cover the cost of repair in the case that a major home item fails, it can also make your home look more attractive to buyers. Prospective buyers will be pleased with the assurance that comes from a home warranty.

The last thing you want is to have to have the pressure of dealing with a surprising failure in the home after you have successfully closed the deal. Deciding whether you or the buyer is responsible for paying for the damages could result in a heated debate. Even in the unfortunate event of a home failure, you can avoid this type of situation by purchasing a seller's home warranty.

Essentially, the home warranty picks up where insurance coverage leaves off by paying for failures in items like heating, plumbing, electricity, and air conditioning. Be advised that the warranty only covers these items if they fail on their own. Improper installation or maintenance, code violations, and unordinary wear and tear can lead to a denial of coverage. Even without a home warranty, the buyer could not reasonably ask you to cover damages that were caused by actions taken on their part.

Depending on the provider, seller's home warranty coverage can differ. Make sure you carefully study and completely understand the policy you are purchasing before you pay for it. In some cases, the home warranty might cover different items before and after the closing.

In most cases, the home warranty lasts for a year. Buyers are given the option to renew the warranty coverage when it expires. Be sure to advise your buyer that the cost to renew the policy might end up being more than the initial cost of the policy.

One of the good things about a seller's home warranty is that it can be included as one of the closing costs. You can obtain the warranty and then defer payment until closing, receiving the benefit of the warranty without having to pay for it until later. The benefit of paying for the seller's home warranty yourself is that you have peace of mind knowing the buyer won't have to call you about an unforeseen problem after closing.