Buying a Home Warranty

Whether you are just buying a new or resale home or have already owned one for a year or even several years you need to consider whether or not it is a good idea to purchase a home warranty. If you just moved into a new home you may not need to consider this option as the builder would have the home under warranty for the first year and usually for two years although they advertise and tell you they have a one year warranty. Check with your registrar of contractors as they usually have contractors warranty their work for a minimum of two years. In this very changing market and with so many home builders closing their doors and declaring bankruptcy a home warranty may still be a consideration.

So you bought a resale home or currently own one now we need to think about a home warranty. Most purchase contracts for buying a resale home has the option to buy a home warranty which most buyers elect to take and usually ask the seller to pay for this warranty. They warranty is generally for one year and you have the option to extend it the following year and every year after that.

If you have lived in your home for years, you may want to look into home warranties for your existing home. Let us explore why you may need to consider buying a home warranty. Depending on what coverage you choose will change the amount you will pay for one year of coverage. Plans start around $325 for the basic plan and the service charge you will incur will be around $55 per service call. Plans will have additional charges to cover things such as pools, appliances that are not built in such as your refrigerator and washer/driers. Plans also have varied costs when purchasing them for things like hauling away the old units, upgrading to a new system and the changes in codes on those new systems etc.

Let us take a look at why you may want to consider this option from the point of view of something breaks. Maybe the air conditioning unit goes out and it will cost $400 to repair it, you pay the $55 service fee and now most of your home warranty has paid for itself. Maybe that air conditioning unit is not repairable and needs to be replaced for about $1700. Now you have saved yourself over $1000 in costs just by having the coverage. Of course the worst case scenario like an air conditioner going out may not happen but you need to consider the risk factor.

You may have other more minor issues like a microwave that breaks or a dishwasher leak or a water heater that may go out as well. These are still costly issues that you will pay a service call and then they will tell you what it will cost to repair the item so your cost would be more than just the home warranty service call would. This is all a very personal choice but you need to look at various factors when considering a home warranty. Some things to consider are: how old is the home? Have any of the larger more expensive items ever been replaced? Would you be able to handle a big bill if something happened?

Just to give you an idea of things that are generally covered so you also get an idea of what expenses may occur here are several items. Your coverage should cover ductwork, ovens and ranges, garbage disposal, drain line stoppages, plumbing leaks, water heater, toilets, electrical system, telephone wiring, garage door openers as well as many other items

If you are buying a home absolutely have the seller provide a year of coverage and if you are buying a bank owned home and the bank will not provide the coverage it is in your best interest to be sure and include it on your purchase contract although you may have to pay for it. A bank owned home is more likely to have items break because you are not getting a sellers property disclosure statement as they have never occupied the home and unknown items may not be in the best condition.

Nancy Niblett is a highly successful Real Estate Agent specializing in the Chandler area. She credits her success to hard work, integrity and honesty. Clients continue to refer her over and over again. Nancy is one of the most successful award-winning agents and currently with West USA Revelation. She was awarded the Silver Top Producing individual agent in 2004, Double Gold individual in 2005 and the annual Spirit and Integrity award in 2005 and 2006. Her most cherished moment was bestowed on her in 2006, the Regional “Culture” award, which is the highest attainable honor given.

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