What is a home warranty?
A home warranty is a protection plan for the essential operating components of your home, covering items like the refrigerator, heater, and air conditioner. Some additional appliances can be included, but at an extra cost, so make sure you have the coverage you need.
Think of the coverage as an extended warranty or insurance policy, similar to what you might get for your flat-screen TV or smartphone. It handles the expenses for repairing or replacing many things that might stop working. Typically, payment plans range from $300 to $900 per year.
When you need a repair, you’ll have to reach out to the provider and pay a deductible. If you call the service provider directly, your warranty company won’t reimburse you for the repair. The company has agreements with repair professionals, and they’ll send someone to fix or replace the malfunctioning item. The cost of repair may be covered by your premium, but you’ll need to make a co-payment for each incident.
A home warranty works almost like an extended warranty or insurance policy you would buy for your flat-screen TV or smartphone. It covers the costs for replacing or repairing many things that may at some point cease functioning. Typically, payment plans range from $300 to $900 per year.
Owning a home is a great achievement. At the same time, it comes with maintenance and additional costs. As a homeowner, you are now responsible for repairs and regular maintenance on your new home. A home warranty can give you comfort that you’ll be covered when something breaks.
Being a first-time homeowner is a journey, and sometimes, surprises happen. Imagine waking up to a leaky water heater! Life’s full of cycles, so it’s smart to be ready for the moments when things need a little TLC or replacement
What do you do when things break?
Many homeowners may not have the time or experience necessary to do small repairs, especially when they come at unexpected times. Some individuals may be lucky enough to have a nearby family member who is knowledgeable in these sorts of incidences. Others may know an electrician or a plumber. But the whole process of getting bids and figuring out what the real cause of the problem is, let alone getting it solved, takes a lot of time. The best thing to do as a new homeowner is to have a home warranty to help you.
Who should have a home warranty?
So, what do you do when things break? Some homeowners may lack the time or experience for small repairs, especially when they happen unexpectedly. Having coverage is the best move for new homeowners, saving time and hassle.
Former renters used to calling landlords for repairs are good candidates for a home warranty. Busy individuals working long hours who may not have time to find repair professionals. They help with expected or unexpected repairs, avoiding the hassle of dealing with the process alone.
Know the life expectancy and condition of your home components through inspection. Most appliances break down after 15 or 20 years, and dealing with several malfunctions simultaneously isn’t ideal. Before purchasing a warranty, shop around, and compare premiums and coverage plans to ensure a good deal, especially for older homes needing more coverage.
Investors not wanting to handle repairs for tenants should also consider home warranties. This is crucial for real estate investors less experienced with property upkeep, providing satisfaction for both you and your tenants.
Before you do purchase a home warranty, however, it is advisable to shop around and compare the various premiums and coverage plans valuable to make sure that you get a good deal. Remember that an older home will definitely need more coverage.
What does a warranty cover?
Not everything. Different companies offer various packages, with varying coverage for items like the refrigerator, washer, or dryer.
Keep your property inspection handy. It’s a valuable resource for tracking necessary future repairs. If you anticipate needing a roof in 10 years, estimate replacement costs and start a savings account, putting aside money monthly for that rainy day to come.
Who pays?
In a home purchase, the responsibility for paying for a home warranty can vary and is typically negotiable between the buyer and the seller. It’s a common practice for sellers to offer a home warranty as an incentive to attract buyers and provide added assurance regarding the condition of the home’s major systems and appliances. In such cases, the seller may cover the cost of the home warranty for a specified period, often one year. However, this is not a strict rule, and negotiations between the buyer and seller can result in different arrangements. Some buyers might choose to include the cost of the home warranty in their offer or negotiate with the seller to share the expense. Ultimately, the specifics are outlined in the terms of the purchase agreement, and both parties should communicate and agree upon who will bear the cost of the home warranty as part of the overall home buying process.