So, Why Do I Need or Want a Home Warranty?
What happens when you move into the home you just bought and find that the refrigerator is broken or the built-in microwave doesn't work at all - perhaps the air conditioning completely fails? If you're among the fortunate and growing number of home buyers taking advantage of the 'home warranty', it's likely that you are only going to pay less than $60 to get that appliance or component fixed.
In recent years, the home warranty service agreement is used as an incentive for prospective buyers as an added 'insurance policy' on the home. These are contracts that cover the costs of repairing and/or replacing major appliances and/or major mechanical systems in your home if they fail after you move in. Furthermore, existing homeowners can often extend these Home Warranties on a yearly basis.
As a Home Inspection helps reveal problems in a home before you buy, a home warranty provides an added layer of security after settlement. Knowing that future repair bills are covered can often be the 'deal maker' of the home-buying process and because this extra security is often an incentive for prospective buyers, many sellers are offering to purchase the warranty for the first year following the sale of their home for these prospective buyers. Policies also exist so that these sellers can purchase the Home Warranty once the home is first listed so that their home is covered while the home is on the market, so that if anything goes wrong during the marketing period it can be rectified at a reasonable cost to the seller as well.
How Do I Get a Warranty - How Much Does it Cost?
Home warranties can be purchased for anywhere from $250 to $500 per year. These plans require you, a seller or sometimes the Realtor to register with the warranty company directly either by phone or online prior to settlement. When an appliance covered by the contract breaks down, the homeowner who is covered simply places a call to a claim center. The company then sends a technician to make the service call and determine what action needs to be performed.
Be mindful that homeowners must use the Home Warranty's claim center technicians or they will not cover the cost of the repair. The Home Warranty company subcontracts various people and companies throughout the United States to perform these repairs, so unless it is pre-authorized, the Home Warranty company will require the homeowner to abide by this one strict rule.
As stated in the Home Warranty's terms, the homeowner will be charged for trip fees or minimal repair costs. All other costs, such as labor or replacement parts will be borne by the Home Warranty company. As an example, a homeowner moving into a home had done a Home Inspection prior to settlement and found a 2-year old water heater in good working condition. After living in the home less than 2 months, the water heater failed completely. Because of the Home Warranty on the property, the new homeowner was able to get a brand new water heater and paid only for a one-time $50 repair fee.
Am I Covered?
Home warranties won't cover major defects, damage or preexisting items. Warranties usually cover items that home insurance excludes, such as broken plumbing, electrical systems, appliances, garbage disposals, well pumps and other items listed in the sales contract. Warranties are usually based on the concept of "working order:": items that are in operation on the day you settle are covered - anything that doesn't work will most likely be removed from coverage.
It's Definitely What You Know!
Before purchasing or accepting a warranty, make sure you know just what coverage your going to get. Knowing this helps avoid frustration later, when something fails that may not be covered by that particular plan. For example, a warranty may cover the heating and air conditioning system, but won't cover installation of a specific type of heat pump. Some protection plans may cover items with a specific dollar limit, while others may charge extra for repairing even basic items such as washers, dryers or refrigerators.
Your warranty may offer limited coverage. The quality and cost of the coverage may vary according to the company and where you live. Some warranties may involve higher service call charges than others. Homeowner warranties are unregulated in some states so ask a professional Realtor to help you. They often have relationships with many of the larger, more reputable Home Warranty companies and can help you choose one best suited to your needs.
Contact Jacque Grenning today for your Home Warranty needs. Jacque has over 20+ years of experience in the Real Estate industry throughout the Maryland, DC & Virginia area. Jacque is here for you - to listen to you and provide you with all the resources you need to find that perfect home.
Jacque Grenning - Realtor, ePro, ABR, CRS, GRI, Associate Broker
"Good Service isn't Expensive..It's Priceless!"
Direct: (301)529.5200 Office: (301)251.1221 x3599 or 3588
Email Jacque
www.HomesToLiveIn.com
Broker:
Keller Williams Realty Advantage
15400 Calhoun Pl #180
Rockville, MD 20855
An Independent Member Broker
