Home warranties work like insurance in that the homeowner pays a monthly premium to a company that will step in to cover the service, repair, and replacement of covered appliances and systems. Sounds great! But is it worth it? The honest answer is it depends. Our real estate agents want to share the pros and cons of home warranties so that you can make an informed decision as to whether it's worthwhile for you.
How Old Is the Home?
New construction almost always includes a warranty for one to 10 years. Before purchasing a warranty, ensure you aren't duplicating coverage you already have. While the builder probably will not cover the major appliances in the home, the manufacturer likely includes a warranty with the purchase for at least a year. Some credit card companies also offer coverage on major purchases.
Are You Buying or Selling a Home With Older Appliances?
Many of our older Ridgewood homes for sale will not be furnished with new appliances. A home warranty is a great way for a seller to offer peace of mind to the buyer without purchasing new appliances. If something breaks down, the buyer can repair or replace it for a reasonable price. However, it is important to check the terms of the warranty before depending on it because not everything will be covered, particularly if the prior owner did not maintain the item according to the terms of the document.
Are You New to the Area?
It can take some time to develop relationships with repair companies and even neighbors who could make recommendations for reliable companies. Most home warranty companies maintain those relationships for you and either provide a list of acceptable repairmen or arrange the repair on your behalf. This is another aspect of the warranty you should familiarize yourself with before you need to use it so that you know who to contact in case of an emergency.
Do You Like to Handle Repairs Yourself?
If so, then a home warranty may not be important to you. But if you are too busy or don't have the tools or the skills to do the work yourself, you will enjoy the ability to make a quick phone call to get the assistance you need.
Some of the pros of a home warranty include the peace of mind it provides and the ability to renew it after a manufacturer's warranty expires. Some cons include dollar limits, denial of claims based on insufficient maintenance, the warranty company's choice of repair versus replacement, and, if replacement is the decision, the company may choose the make and model of the new item. Not all costs are covered by the warranty. The homeowner may be required to pay a service fee.
Without reviewing the details, it's impossible to tell whether a home warranty is a good financial choice for a homebuyer. Fortunately, our real estate professionals will be happy to discuss your unique situation with you and advise you appropriately. We know you have questions. Contact us for the answers!
