Why Home Warranties Are A Must

The Secret To Saving Yourself From A Dying Home

March 6th, 2008 categories: Buyers, For Homeowners, Sellers

home warranty So you have had the home inspection done on the home you are buying. A few things needed some love. The HVAC is looking a little old but is still blowing and the dishwasher is the only thing that hasn’t been replaced.

Sounds a little risky. Its not like you will have a few grand to put up for a new air conditioning system if it dies this summer. What to do? Does your home owners insurance cover these items? Probably not.

Don’t worry. You are working with the Jonathan Bunn. Rated the best Realtor around in my opinion. That stands for something, right?

When purchasing an older home, I highly recommend a home warranty.

What is a home warranty? A home warranty is temporary insurance you can purchase that will cover most of the items that standard insurance does not cover. Things like; appliances, heating systems, cooling systems, garage door openers, washer/dryer, ceiling fans, garbage door openers, disposals, plumbing, electrical systems, trash compactor, etc… You can add other items depending on what home warranty plan you get.

Most home warranties last a year but can be extended from year to year. The typical cost will run you from the mid $300’s to the low $400’s. The price will vary based on what you have covered along with how much of a deductible you want to pay when the home warranty service provider comes out to fix an item.

For example: I paid $385 this year for the home warranty on my town home. This past week my dishwasher started acting funny so I called the home warranty guys. I paid $55 for them to come out and whala! I am covered. No parts charge, no hourly charge, no estimate charge. $55 and I am done.

The question you will have to decide for yourself is, “Will it be worth it?” Truthfully, I could have probably had this addressed for much less than $385. However, my home is getting too an age where this most likely will not be the only issue I call about this year. Some warranty companies will even buy you a new whatever if they cannot fix the present problem. Pretty cool.

So, if you are buying a brand new home, there is a good chance you already have coverage on your items and don’t need a warranty for a couple of years. Your call. If you are buying a previously lived in home, I would go for it. You can get one at settlement or wait some time like I did.

Oh, by the way… Do not make the mistake that one of my clients made. If you have a home warranty and you have a problem that needs to be fixed, DO NOT CALL your own fix-it-guy and then expect the home warranty company to reimburse you. CALL THEM FIRST OR YOU WILL BE PAYING ALL OF YOUR OWN FEES.

Sellers, if you have an older home, it may be an attractive offer to have your Realtor advertise that you will pay for the new buyers 1st year of the home warranty. It could save you from buyers asking you to drop your price for a new HVAC. No guarantees. On some plans you can even get the warranty while it is on the market to cover any issues during the selling period and not have to pay for the plan until settlement when you transfer it to the buyer. Sweet deal. Especially for vacant homes.