Are home warranties worth the added expense? A lot goes into buying and maintaining a home—money most of all. Rather than depleting your savings on home repairs or replacing broken-down appliances, it may be a good idea to get a home warranty. But is this a worthwhile choice for every homeowner? Our real estate agents can help you make the right decision.
Most home warranties are typically bought in conjunction with a home purchase. As such, it's a decision you'll have to make before you sign on the dotted line. That said, some sellers purchase a home warranty as an added incentive for buyers and an assurance that the home is in good condition. Buying a home comes with many hidden costs that tend to add up over time. A home warranty is an insurance policy that helps make covering these costs a little easier on your wallet.
So, here's everything you need to know about a home warranty and why you should buy one or have it included as part of the negotiation process.
It's worth noting that a home warranty is completely different from homeowners insurance. Homeowners insurance helps protect against loss from major perils such as fires, natural disasters, and property crimes. On the other hand, a home warranty provides discounted repairs and replacement services. It can cover almost any major appliance in a home, from washers and dryers to swimming pools.
Another important factor to consider is that the costs of home warranties don't necessarily increase with the property's age.
In a buyer's market, you'll find that savvy home sellers offer a home warranty to buyers as part of the purchase agreement. But just because a home warranty isn't on the table doesn't mean you can't negotiate for one. What you need is a stellar real estate agent by your side. Sellers usually agree to add this provision, especially when the potential buyer is well-qualified. It's just one of those things that make the transaction process easier for both sides.
For home sellers, purchasing a home warranty on behalf of the buyer may provide a modicum of protection against any issues that arise after the sale closes. It can also help reassure the buyer. After all, they have no way of knowing how well the home's appliances have been maintained over the years.
If you're a homebuyer, a home warranty acts as a buffer against unforeseen repair bills. Some home repairs, such as replacing a heat pump, could run well into the thousands. Most home warranties cover:
Unlike manufacturer warranties, home warranties can be renewed and are often valid for a longer period. Be sure to read through the fine print when purchasing a home warranty. Note the duration of coverage as well as the repairs and appliances covered. It's also a good idea to ask the seller for a maintenance history of the major systems and appliances in the house.
Despite these benefits, it may be a good idea to skip the home warranty if:
Many homebuyers would feel better having a home warranty. If you still have questions about home warranties or the home-buying process, contact us today. We'd be more than happy to help you through the process.