Homeowners looking to sell often purchase home warranties to help attract buyers. In other cases, homebuyers purchase home warranties a part of the real estate process, and may even receive a discount if done so within 30 days of closing on the home.

What Is a Home Warranty?

A home warranty is a protection plan that helps finance repairs or replacements on certain aspects of your home that occur after closing, were not apparent during a home inspection or are not covered by homeowner’s insurance. There are different types of home warranties, each of which is accessed when systems or appliances in your home are not longer in proper working order.

What Do Home Warranties Cover?

Home warranties can be purchased to cover:

• Home appliances (refrigerator, stove, dishwasher, etc.)

• HVAC system

• Electrical system

• Phone system (wiring)

• Plumbing

• Water heater

• Smoke detectors

• Exhaust fans

• Doorbells

• Roof

• Pool

How Long Do Home Warranties Last?

Home warranties are relatively inexpensive, and typically incur a cost between $250 and $500 for an annual premium. Dates of coverage and the time at which coverage begins vary depending on who is purchasing the policy (homebuyer, seller or existing homeowner). At the end of the 365-day term, the owner of the policy can then elect to renew or dissolve the home warranty coverage.

What to Consider When Buying a Home Warranty

Some aspects of your home may be covered under a builder’s warranty, depending on the construction age. If you decide to purchase a home warranty, just be certain that you fully understand the details of your policy, such as under what circumstances coverage kicks in, coverage limits and any additional expenses for which you might be responsible (such as service fees or deductibles). Home warranties only cover those systems and appliances specifically mentioned in your contract.

Technology has certainly improved our lives, businesses and the speed with which we can accomplish a multitude of tasks. However, technological advancements have also increased the incidence of cyber crimes, making it easier for thieves to steal sensitive and personal information, and ultimately your money.

Mortgage Closing Scams

“Mortgage closing scams” are one such fraudulent activity of which home buyers and sellers should be aware. In these scenarios, thieves send emails to unsuspecting parties stating that the wrong wiring information was previously provided or wiring instructions need to be changed, and the funds must be wired to a new or different account number. 

Emails hackers are very skilled at making these emails appear legitimate, and as though they’re coming from a credible source with whom the person has been in contact (home buyer or seller, mortgage lender, real estate agent, title agent or closing attorney).

How to Protect Yourself as Home Buyer or Seller

Closing time in a real estate transaction can often feel hurried and time-sensitive. Even if you’re feeling the pressure of time, it’s best to avoid responding quickly to emails regarding your real estate transaction, without first determining their authenticity. Here are tips on how to protect your personal information and assets as a home buyer or seller:

• Be very leery of emails asking for personal information, account numbers or financial details of your upcoming closing. Also be suspicious of emails requesting a change in payment type, financial institution or wiring instructions. If you receive such an email, do not contact the apparent sender via return email or the numbers provided in the email signature. Instead, visit the title company in person if possible, or use a phone number you know to be associated with the actual company or person.

• Review email correspondence from mortgage lenders or closing agents carefully. Bogus emails are often sent at odd hours of the day or night and may contain poor grammar or sentence structure, misspelled words and odd phrasing. The sender’s email address may also be slightly different (for example, one letter or character off from that of the legitimate party).

• Letting your bank know about anticipated wire transfers, the name of the sender or receiver, and dollar amount of the transaction can help your financial institution identify any red flags indicating fraudulent activity, if they arise. 

• It can be extremely difficult to recover funds wired to a fraudulent account. Protect your money and real estate investment by remaining aware and scrutinizing any communication regarding the real estate closing to determine its authenticity.

Though wire fraud and mortgage closing scams are on the rise, you can minimize your risk of becoming a victim of fraudulent activity by doing your due diligence when it comes to providing requested information.

How We Protect Against Wire Fraud at Linear Title & Escrow

At Linear Title & Escrow, we take the threat of wire fraud very seriously. We utilize encrypted emails when sending wire transfer instructions and do not accept any wiring instructions that are not encrypted. As an additional safeguard, we confirm all wiring instructions, regardless of whether or not we receive them encrypted.

To learn more about to protect against wire fraud, contact our team today!