If you have ever purchased a home, you were most likely pitched a home warranty by the loan officer or realtor. In some cases, the lender or realtor covered the cost. In others, the seller may have paid, or the buyer may have incurred the cost.
Unfortunately, the majority of homebuyers do not read the fine print or even shop the plans. There are many things to consider but the most important thing is to realize that the warranty is not going to cover everything! Some appliances will be excluded and other restrictions will apply.
The best way to view a home warranty is to consider it as a first level of defense with unexpected repairs but not the final wall of defense. Once a homeowner realizes this fact, the warranty is in most cases, a great option.
Most realtors offer the standard warranty. It covers a few appliances and some other pars of the home. Examine the literature carefully as the cost to add on other appliances is a la carte and can become expensive quickly.
Look at the gold or platinum plans, as they will include much more coverage and for far less than buying piece meal. See if the agent, lender, or seller will cover the costs. Also, ask if the coverage is renewable. Many people end up renewing the plan, which is a great testimonial.
Also, look at the charges for service calls. They range between $50 and $75. The devil is in the details: some charge that fee every time the repair tech comes out for the same appliance. Others limit it to one charge per appliance and the best plans charge the repair cost or the trip fee, whichever is less.
According to one study, 2 of every 3 buyers report the failure of two major items within the first year of ownership. A warranty from a solid firm will assuage any trepidation a homebuyer may have when preparing to buy a home.
Finally, look into the pre-existing conditions clause and inquire about the home inspection benefits. Contact your realtor or lender and ask them to provide the warranty information well before closing. This way, you can investigate and compare plans ahead of time.
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