Home Warranty
The last thing a home buyer wants to worry about after closing is what could possibly break or malfunction in her new home. Since that can cover a multitude of items and systems, for peace of mind, it's a good idea to get a home protection plan. It's especially a good idea to obtain a home warranty if you're a first time home buyerr with no experience maintaining a home.
Who Pays for the Home Warranty?
Now, whether the seller pays for the home protection plan and home warranty coverage or whether the buyer pays for it, will depend on your local customs. It varies. In many locales, it's normal for a seller to pay for the coverage because it's a seller benefit. Why? Because then the buyer won't be calling the seller after closing if something breaks. Many real estate agents will also give buyers a home warranty as a gift at closing.
How Much does a Home Warranty Cost?
They are fairly inexpensive, typically ranging from $350 to $450, depending on coverage. Home warranty companies sometimes run special sales and either discount policy prices or offer additional coverage for the same price. The policies are prepaid for a year in advance, at which time they expire or can be renewed.
How Do They Work?
Although specific plans provide for specific types of coverage, most operate the same way. If a home system or appliance breaks or stops working, the home owner calls the home warranty company. The home warranty company calls a provider with which it has a business arrangement. The specific provider calls the home owner to make an appointment.
The provider fixes the problem. If an appliance is malfunctioning and cannot be repaired, depending on contract coverage, the home warranty company will pay to replace and install the appliance.
The home owner pays a small trade service fee (less than $100).
Types of Coverage
Because all plans differ, you will want to ask specifically what is covered. Ask your real estate agent if upgrades are available. Pay close attention to whether the home warranty company will pay for repairs to make certain types of systems or appliances compliant with new regulations.
What is Not Covered?
Outdoor items such as sprinklers
Faucet repairs are not covered under all plans
Not all plans pay for refrigerators, washers & dryers or garage door openers
Spa or pools, unless specific coverage requested
Permit fees
Haul aways
What Can Cause Denial of Payment?
Improper maintenance
Code violations
Unusual wear and tear
Improper installation
General Coverage
Air conditioning
Dishwashers
Doorbells
Furnace / heating
Water heater
Ductwork
Garbage disposal
Inside plumbing stoppages
Ceiling fans
Electrical systems
Range and oven
Telephone wiring
Because coverages vary from policy to policy, ask to see a sample copy of a policy before you commit.
