The Home Warranty

Just like when you buy a new car you simply don't think about something breaking in the home you just purchased. Yet, the reality is your home is probably not brand new and even new items can have faults.

Hence we have the home warranty, which works much like any other warranty on a product. Warranties cover just about anything and everything built into the home or that came with the home for a certain length of time.

The particulars can vary with each home purchase but they are a marvelous addition to have when you're buying a house.

Who Pays For The Warranty?

The warranty can be paid for by a number of different people depending upon the conditions, the actual sale itself, the locale, and the conditions. In many cases a Seller will offer to pay for the home warranty as an incentive to lure buyers. It assures that buyers that the home is covered and they don't have to worry about any large issues for at least the first year or length of the warranty. A home warranty is an excellent lure to buyers.

Buyers sometimes opt to purchase a home warranty for the peace of mind they get by having it to fall back on in case something large goes wrong. Generally speaking most buyers dive into just about all of their savings to cover buying the house and moving costs. Knowing that if their furnace quits they're covered for nothing more than a deductible and sometimes not even that can be a wonderful thing. If the seller doesn't offer it, the buyer can often use it as a contingency clause also and bargain to have the Seller add the Home Warranty on as part of the "deal".

Once in a while a Realtor will add the Home Warranty on as part of a "thank you" to the buyers. This is completely dependent upon the agent, their ability to do so, and the amount of commission they'll end up making. Home warranties can generally run anywhere from $200 to $500 or so and in some cases this added touch can be an inexpensive way to make a buyer very happy with their final deal and give the agent some great advertisement to their friends and family who may be looking to buy a home in the future. This small gesture makes a huge impact and is generally an inexpensive but wonderful thing to have.

How a Home Warranty Works

Each warranty is worded in its own way but most work essentially the same. Because each plan does differ you will want to make sure ahead of time what is covered by your particular warranty. Basically if you have something in the home that breaks (an appliance that came with the home, a toilet, a furnace, etc.) you contact the warranty company. They handle it all from there, contacting their own contractor to take care of the problem. The contractor gets in touch with you and schedules an appointment to come out and take care of the problem. In some cases there are no fees that you need to pay in other cases there are small service fees (generally under $100) that you are responsible for. In some cases the warranty company may decide they won't cover something but it's not very common because the warranties spell out quite well what will and will not be covered and why. Obviously if it's something that has broken due to your abuse they're not going to pay for it.

Generally improper maintenance, code violations, unusual wear and tear and improper installation of an item can cause denial of coverage. If the service provider denies you coverage you can dispute it; often by calling your agent if she has worked with this particular warranty company before or calling the warranty company direct. In most cases the warranty companies are very easy to work with and will end up being very speedy at making sure you are taken care of.

If you ask most people who have used their home warranties you will find that a very high percentage of them have had positive experiences and have been more than happy that they've had these warranties in place when something went wrong.

What's Covered and What's Not?

Most warranties will generally cover furnaces, air conditioning, water heaters, ductwork, garbage disposal, appliances that were a part of the house, inside plumbing, doorbells, ceiling fans, plumbing stoppages, electrical issues, faucets are sometimes covered, and if applicable anymore indoor telephone wiring. There may be other items covered or not covered depending upon your particular warranty.

Most warranties don't cover anything that has been improperly installed, permit fees, hauling away garbage or unwanted items left by the previous owner, pools or spas (unless specifically stated in the warranty plan), outdoor sprinkler systems, and outdoor items (patios, walkways, cement, etc.).

Some items that may or may not be covered and that are highly dependent upon the specifications of the warranty are refrigerators, automatic garage door openers and their system, dishwashers, clothing washers and dryers, and some faucets and faucet systems may or may not be covered. If you have special items such as spas, saunas, pools and such you will have to have these items specifically listed if you want them covered and the warranty company may or may not accept these items.

The Benefits

Basically for the cost of a home warranty it is one of the best purchases you can make when buying a home. If you can get it to be a part of the seller's offer that's even better and if your agent wants to give you an exceptional thank you with a gift of the home warranty send them a huge thank you card! It's a purchase worth its price if something does go wrong. We've heard stories of people having complete toilets replaced because their innards cannot be replaced due to the age of the toilet. We've seen hot water tanks that have sprung leaks instantly replaced by professional plumbers and new home owners breathing a sigh of relief. When they are needed, just like any insurance, they are a true blessing!