Why You Need a Home Warranty

Mike Capelle, Broker/OwnerMike Capelle, Broker/Owner

When you are purchasing an existing home, you need to know about a home warranty.

After a home buyer has investigated the condition of an existing home and signed off on repairs before completing the home purchase, they may be in for a shock when the water heater breaks on a cold winter morning, or the dishwasher starts to leak all over the hardwood floors in the kitchen. But with home ownership comes the responsibility for problems that arise. And a fixture that passed inspection and worked fine when you moved in can fail unexpectedly, especially if not brand new. What do you do?

Many homeowners aren’t equipped to perform even small repairs. For some, a handy neighbor or family member nearby could help. Or you may know a plumber or an electrician. Inopportune or expensive repairs are upsetting, especially to the owner of a newly purchased home. But there is an alternative for a new homeowner: A home warranty.

What is a home warranty?

Much like insurance or the extended warranty you buy for your smartphone or flat screen television, a home warranty covers the costs of repairing or replacing almost any major system or appliance in your home. Most plans have a basic component that covers common home systems and appliances. Homeowners can also pay for optional components that provide additional coverage for specialized items. A basic plan typically costs about $400 for one year of coverage.

If you had a home warranty, you wouldn’t have to call around to get estimates for repairs when a problem occurs. You wouldn’t have to pay out of pocket to get the problem fixed or have equipment replaced, either. Instead, you would just call your home warranty provider or submit a form online. The warranty company would call the appropriate tradespeople with whom it has made arrangements, and send someone to fix the problem, if possible, or replace the malfunctioning appliance with a brand new one. Your home warranty premium will cover the costs — though you may be responsible for a deductible depending on the plan purchased.

Who should buy a home warranty?

Home warranties are particularly great for first-time home buyers who had been renters. They’re used to calling the landlord whenever there’s a problem, and a home warranty company takes over that role.

Home warranties can also be a good idea for buyers of existing homes (not newly constructed). If you had your home inspected prior to purchase, you’ll have an idea of the condition and life expectancy of many of your systems and appliances. An existing home can also have many fixtures of the same age that may start to break down in the same time frame. You will welcome the home warranty when something quits working out of the blue.

Not to mention that many homeowners are often busy with work and family, and might not have the time or energy to call around to find a plumber or an electrician to get quotes or bids.

Sometimes, it takes just one costly and unexpected system repair — and the drama associated with it — to realize the savings of a one-year home warranty. Home warranties can save home buyers a lot of time and money — particularly in the first year of ownership, when they may be short on both.

How to buy a home warranty?

A good real estate agent should discuss a home warranty with you when deciding on the terms of your offer to purchase a home. The cost can be a negotiating point with the Seller, with the Seller possibly paying for part or all of the cost of a home warranty. And your agent should have information about several home warranty companies servicing your area.

When you are ready for your first or next home, Sunset Vista Realty is ready to help. Check out our Buyer Services.

— Inspiration: Zillow Blog

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