Real Estate Information

As you wrap up the final details of buying your dream home, there will be the issue of whether you want to buy a home warranty. These types of warranties are set up to fix and substitute covered broken or worn items with new ones. If you think your next property could be headed for some maintenance issues, make sure you apply for one prior to the closing of escrow.

Your home warranty will spell out which mechanical systems and built-in appliances will be covered. Most policies are written to repair and replace items such as plumbing, heater, and electrical components. If you’re willing to invest more money, you can purchase additional coverage for items such as the air conditioner, whirlpool jacuzzi, pool, and roof. If a situation occurs where you have a breakdown with any of these items you can pick up the phone and contact your warranty company to determine what the problem is. If the warranty company agrees with you that the repair is part of your benefits you’ll need to contribute a predetermined amount of money to cover parts and labor which can cost you between 60 to 100 dollars.

If you decide to check into the customer complaint history of most home warranty companies, you’ll be disappointed to learn most companies have piles of complaints filed against them. Many homeowners are angry when they uncover the hidden pre-existing condition clause which prevents coverage on pre-existing issues. If you were checking out a warranty policy that has this pre-existing condition clause, make sure you understand your policy will not cover you for any new problems.

You should also check to see if the policy has additional exclusions that prevent coverage due to poor maintenance or servicing, wrong installations, and inaccessible areas of the property. There are some policies that exclude repairs until you cover the cost to bring an outdated system up to current building standards. You should also note that many warranties only provide service for items failing as a result of normal wear and tear.

If you shop around, you’ll discover most warranty policies are priced somewhere between $300 to $1000 per year depending on the home size and type of benefits you choose. As you search for your new home, you’ll find most sellers willing to include the first year of coverage as a gift for buying their home. Even your agent may even be willing to pay for the first year so you’ll be satisfied with their service.

However if you’ll have to foot the bill to purchase the home warranty, you may be better off setting aside money for an annual repair fund to cover unexpected problems. The goal of $5000 per year is recommended to adequately cover most major repairs.

While there may be many homeowners dissatisfied with their policies, you will find some policyholders happy with their warranty. If you happen to get a repair person who is understanding and gets your repair approved, you’ll benefit from having a policy. Make sure you study each warranty thoroughly and check out the exclusion clauses.

If your state has a government agency which regulates home warranties, check the complete record of a company you want to sign up for.