Understanding the Pros & Cons of a Home Warranty
There are many terms in the world of real estate and among the long list, a home warranty may come up. In simpler terms, a home warranty is a policy a homeowner pays for that covers the cost of repairing many home appliances if they should break down. There are plenty of things you buy that come with a warranty in case they should break down. But what about homes? It turns out, a home warranty plan is something that you can do. Many homeowners will purchase a one-year home warranty plan right when they close on a home since such protections will provide peace of mind that wouldn’t happen if you get hit with out-of-pocket expenses after moving in.
Continue to read to unravel what a home warranty is, and what the pros and cons of getting one involves.
Everything a Traditional Home Warranty Covers
A home warranty should not be confused with home insurance, which covers your home’s structure and belongings in the event of a house fire, flood, storm, or accident. Home warranty companies will cover repairs and replacements on home systems, including electrical systems, water heaters, plumbing, kitchen appliances, and washers due to normal wear and tear. Home warranty companies will usually set up a service contract to cover the following items:
- Basic home systems like electrical and plumbing.
- Cooling and heating systems like the water heater.
- Appliances like dryer and washer.
- Kitchen appliances like the range, oven, garbage disposal, and built-in microwave.
The Benefits of a Home Warranty for Homeowners & Potential Buyers
A home warranty benefits homeowners by providing reassurance that can move in without worrying about add-ons or surprise repairs being shelled out. A home warranty can benefit home sellers as it covers elements during the listing period. Some home warranty companies offer free seller’s coverage during this time with the thought that potential buyers will continue the coverage. Typically, home sellers will offer to pay for the first year of a buyer’s home warranty to entice buyers to finalize the sale of the home.
Brooke Krinsky of Grant Team Real Estate had this to say about the benefits of a home warranty:
“A majority of people do not think that home warranty companies are worth the cost. A home warranty isn’t always necessary with newer homes, as most appliances are covered by manufacturer warranties. In general, the older your home is, the greater the odds that something is bound to break, making home warranties a wise choice. Not all home warranty companies differentiate between new and old homes when it comes to cost, making a warranty especially appealing and cost-effective if you are looking into purchasing an older home.”
What Happens if Something Breaks Under Home Warranty?
Home repairs are always a massive headache, and you might be wondering if a broken appliance is covered by your home warranty. To find out whether or not you are responsible for paying a deductible, call your chosen provider or customer service to connect with a qualified contractor in your San Jose, CA neighborhood. Always remember that a home warranty does not mean that you are free from funding a “covered item.” Usually, you will be responsible for paying off a service call, fee, or part of the bill up to your home warranty deductible first.
Conclusion
While there are certainly some who would consider a home warranty not worth the investment, it is a good idea for people who would rather be safe than sorry when buying a home, new or old. Speak with a trusted real estate agent for advice and check out at least three home warranty companies to see which one will work best for your personal needs. Let the professionals at Homeowner Experience Real Estate guide you in finding your dream home in the many wonderful neighborhoods in Silicon Valley today!