TO HOME WARRANTY OR NOT?

In today’s strained economy homebuyers are looking for ways to save money when it comes to their real estate transaction.  While it may seem as if purchasing a Home Warranty may be a “luxury” for your real estate purchase, it is more like insurance against many costly repairs that could be needed upon you moving into that new home.  Some great things to know about a home warranty:

While not everything in your home can be covered, A home warranty is essentially a service contact that covers the repair or replacement of the most frequently occurring breakdowns of home system components and appliances.  When a covered item breaks down (ie appliance, plumbing, etc.), you will call an 800 number (available 24 hours per day, 7 days per week) to initiate a service request.  The company will then contact one of their local approved and insured contractors to schedule a time for that specialist to diagnose the problem.  There is generally a small service call fee that you give to the contractor when they arrive to diagnose the problem (usually under $50).  The contractor will then repair or replace the part and you will not have to pay for any further services related to the call unless the part is not covered by the warranty.   Be sure to discuss the possible uncovered components of the broken part with the warranty company before you initiate the repair so you won’t be surprised if a component is not covered. 

So…how much does a home warranty cost and who pays for it?  A one-year warranty usually costs between $350.00 and $550.00 depending upon the additional coverage you may need (ie septic, well, pool, etc.) and can be renewed annually for slightly more. Should you get a home warranty?  That really depends upon you.  If purchasing a home that hasn’t been lived in for a while or is in need of repair, as a Realtor I say it is essential.  You never know what unexpected suprises you will get upon moving in.  If buying an REO or probate it is also essential as the sellers are exempt from disclosing many material facts about the property that a typical owner might know since they haven’t actually lived on the property and don’t know what works or doesn’t.  What I would ask you to weigh out is whether one of the biggest purchases of your life is worth spending under $550.00 to protect it during the first year…