An insurance industry has grown up around insuring buyers against potential problems when they first buy a home. This type of insurance has become more and more popular. Home warranty plans cover the major components of the home that may break down in the first year. The plans cover the cost of repair or replacement (less a deductible of about $35) for the kitchen appliances, except the refrigerator, washer, and dryer, which are considered personal property. Most plans also cover the heater, water heater, plumbing and electrical systems, and, in some states, a limited amount of roof repair. The cost of these policies is in the $250 to $500 range and can be well worth it. Your agent probably works with one or two different home warranty companies.

If you do not have an agent or your agent does not work with these companies, you can check the Internet. Some of the most popular home warranty companies are Old Republic (www.orhp.com), First American Home

Warranty (www.homewarranty.firstam.com), and American Home Shield (www.americanhomeshield.com). Read all the fine print. Pre-existing conditions, incorrect modifications to appliances, and some other items are not covered under these plans.

After spending their life savings getting into a house, it is great for buyers to know that the major expenses are covered for the first year. As a seller, offering a home warranty to prospective buyers can also be a great selling feature. Mention it on your flyer and in the MLS. It will give the buyer peace of mind, especially with an older home.

As a seller, a home warranty policy provides the security of knowing the buyer will not come back to you six months after closing and ask for a water heater. You may also qualify for seller's coverage, usually for a small fee. This will put the policy in place while you are on the market. If any of the major components of the home fail during this time, repair or replacement can be handled by the home warranty company. Just as no one wants to put new tires on a car he is selling, no one wants to replace a dishwasher in a house he is selling.