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Written By Erin EasleyPublished 10/31/23
The whole process of buying a home can be exciting and intimidating. No doubt that the huge responsibility that will come with owning your own home can make you nervous, not to mention the anxiety of having that large debt to repay.
And when it comes to knowing all there is to know about a house you buy, the tour you take prior to purchasing a home, won’t really tell you everything. Like how well has the home been kept regarding the maintenance of appliances, electrical, plumbing, and structural? This is where buying a home warranty comes into consideration.
It is normal to worry about what can go wrong after you purchase a home. Like the refrigerator or stove going out a week after you move in, or the plumbing bursting in the basement the first winter you’re in the house. To protect yourself against these calamities, ask if about a home warranty when buying a home.
A home warranty isn’t required by the lender like homeowner’s insurance is. A home warranty is a service contract that will pay to repair or replace items such as appliances, HVAC, and plumbing. A home warranty offers you peace of mind, up to a certain limit. Every home warranty provider will have some leeway within every policy that allows them to deny a claim. And that is what you want to review before buying into one or renew one that comes with the house you buy.
Yes, often a seller will include a home warranty plan with the sale of the house at no additional charge to the buyer. If a buyer’s home warranty coverage is offered by the seller at no additional charge, by all means, you should accept it. But realize that even though you won’t be paying the monthly premiums, or it isn’t added to the purchase price, you will be responsible for a service fee, usually in the range of $50 to $75 per each repair or replacement.
Now that we have a clear understanding of what a home warranty is and how it operates, let's delve into the compelling reasons why you should consider requesting a home warranty when buying a home.
Homeownership is filled with unexpected surprises. From a sudden plumbing leak to a malfunctioning air conditioner in the middle of summer, these surprises can be costly and stressful. With a home warranty in place, you have peace of mind knowing that many of these unexpected expenses are covered, and you won't be caught off guard by a major repair bill. This peace of mind can make your transition into homeownership smoother and less worrisome.
Home repairs and replacements can be expensive. The cost of fixing a major system or appliance can run into thousands of dollars, and these expenses can strain your budget. With a home warranty, you only need to pay a relatively small service fee when a covered item requires attention, which is a far more predictable and manageable cost. This financial protection can help you maintain your budget and avoid financial strain during your first years as a homeowner.
Even if you have an emergency fund, unexpected home repairs can deplete your savings quickly. Home warranties offer a budget-friendly way to address these issues. By spreading out the cost of repairs through the service fee, you can avoid depleting your savings or taking on high-interest debt to cover the expense.
Your home is one of the most significant investments you'll ever make. Protecting this investment is essential. A home warranty ensures that the essential systems and appliances in your home remain in good working condition, safeguarding the value of your property. It can also be a valuable selling point if you decide to put your home on the market in the future.
Home warranties often include regular maintenance services for covered items. Regular maintenance can extend the lifespan of your systems and appliances, ensuring that they function efficiently. For example, having your HVAC system serviced annually can prevent costly breakdowns and reduce energy consumption. With a home warranty, you won't need to remember to schedule these maintenance appointments; the warranty provider typically takes care of it for you.
Dealing with home repairs can be time-consuming and frustrating. Coordinating with contractors, finding reliable service providers, and waiting for repairs can be a hassle. Home warranties streamline this process, as they have a network of qualified service technicians ready to assist you. The warranty provider manages all the details, so you can focus on other aspects of your life.
Home warranty plans are not one-size-fits-all. You can typically choose from various coverage options to suit your specific needs and budget. This allows you to tailor the warranty to your home's unique characteristics and your personal preferences.
First-time homebuyers often lack the experience to deal with common home maintenance issues. A home warranty can serve as a valuable resource, providing guidance and support when problems arise. You can learn more about the home's systems and appliances, how they work, and how to maintain them effectively.
With a home warranty, repairs are typically expedited. When a covered item breaks down, the warranty provider understands the urgency and aims to have a technician at your home as soon as possible. This can be especially crucial for essential systems like heating or cooling during extreme weather conditions.
Buyer's remorse is a common feeling after a major purchase. When you're buying a home, this can be exacerbated by the stress of homeownership and the unknowns associated with the property. A home warranty can help alleviate some of this remorse by providing a safety net and reducing the uncertainty surrounding potential future repairs.
When buying a newly built construction home, new home buyers’ warranty will usually be covered by the builder’s warranty as required by each state, or the manufacturer’s warranty, which is usually one year from the date of purchase. You shouldn’t be concerned about a home warranty plan being offered unless you’re buying a pre-existing home with older, used appliances.
Yes, home warranty plans are available to all homeowners, not just to sellers. First, confirm what may be covered already, such as the HVAC or water heater. If the current owner just had these replaced, the warranty may switch over to the new owner if it is still within the warranty period.
You should also consider if it is something that you are going to get your money’s worth from it. As we mentioned before, there are limitations and many home warranty companies have leeway within their plans that allow them to deny claims for repairs and replacements. There things that will not be covered with a home warranty plan as well, like non-mechanical items like the structure of your home or the windows. And depending on how old the items in your home are, the home warranty plan may not cover them.
And if you plan to buy new appliances or other major fixtures for your home, these are the products that your credit card may offer coverage extended beyond the manufacturers. For some homeowners, they put the money aside that would pay for a home warranty as an emergency fund to pay for those unexpected repairs and replacements.
If you've decided that a home warranty is the right choice for you, it's essential to know how to select the right plan and provider. Here are some tips to guide your decision:
Research Providers: Start by researching reputable home warranty providers. Read customer reviews and ratings to get a sense of the quality of service they offer.
Understand Coverage: Carefully review the coverage options available and choose a plan that aligns with your specific needs. Don't pay for coverage you don't require.
Examine Service Fees: Compare the service fees of different providers and choose one that offers reasonable fees without sacrificing quality service.
Check for Exclusions: Understand the exclusions and limitations of the contract. Ensure that the items you're most concerned about are covered.
Inquire About Renewals: Ask about the renewal process and whether there are any changes in coverage or fees when renewing your home warranty.
Read the Contract: Thoroughly read the contract, paying attention to the terms and conditions. If you have any questions, seek clarification before signing.
Ask for Recommendations: If you know friends or family who have used a home warranty, ask for their recommendations and experiences with providers.
Consider Local Providers: Some regions have local home warranty providers with specialized knowledge of local systems and conditions. These providers may offer more tailored coverage.
If you still have concerns and questions whether you need a home warranty, give us a call at Liberty Home Guard today. We have a team of experts in this field and will be glad to tell you about the options available and what they will cost.