Home warranties are actually service contracts that can be purchased to protect homeowners against unexpected home appliance and system repairs. They are good for a certain period of time, normally one year. Home warranties are renewable after the initial contract period. Although these service contracts are pretty common in today’s real estate market, they do not automatically come as a part of every real estate transaction.
Most home warranties cover the repair and/or replacement of equipment and appliances such as dishwashers, plumbing systems, electrical systems, hot water heaters, etc. Each warranty is different so it is important to read the policy of any that you are considering. Optional coverages may be available at additional costs. Options are generally needed for pools, built-in spa equipment, well pumps, and septic systems. These service plans do have limitations. Coverage and prices also vary considerably among warranty companies. It is important to do your homework and to know that no home warranty will call everything.
Home warranties are not automatically included as a part of every real estate transaction. They can be negotiated into a sales agreement. They can be paid for by either the buyer or the seller. While no warranty is perfect, we do see value in them for our clients and suggest them on every transaction. Home warranties do not cover everything.
Our clients have had thousands and thousands of dollars in repairs done every year for just the service call charge. This charge is normally between $70-$90 and is payable each time a service is needed. Depending on the home warranty that is purchased, coverage is available for both the seller and the buyer. If plans are ordered for seller coverage during the term of the listing, there is actually no upfront charge for the warranty which is another added benefit. The yearly cost of a policy ranges from $390-$800/year. The cost varies based on coverage, home size and whether or not it is for seller coverage, buyer coverage or both.
If you have any questions about which providers we recommend or about your existing service contract, please give us a ring! Follow more about the home buying process here.