What Is The Deal With Home Warranties

Dated: 10/07/2019

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About a week ago, I walked into the house after a lonnnng day of showing property and negotiating inspections and what do I see glaring across the room laying ever so "out in the open" on the kitchen bar?  The dreaded IPhone box!  Immediately I thought "Who has that kind of money lying around just waiting to buy a new IPhone 20 (or whatever fancy version we are up to now)?"   I waited patiently for my hubby to arrive home from work and began my interrogation on on the situation (What happened to your phone?  How much did this cost? Where did you have $1,499 hiding out?)  He smiled that "you'll be so proud of me smile" and said "I only had to pay $100, mine broke  and my old one had a warranty!"  he was right, I was so proud of him.  Not just for saving $1,399 dollars, yet also for inspiring my next Real Estate Blog... What's The Deal With Home Warranties.  

What Is a Home Warranty?

Home warranties provide financial protection from a service provider for homeowners who might be faced with unexpected problems with their appliances. In Louisiana it's important to know that our state waives Redhibition after a transfer of property.  (ok Steph, what does that mean?)  To put it simple, once you purchase your new abode, if the very next day the water heater craps out or the dishwasher stops working, you can't go back to the seller and ask for repairs.  This is also why it's EXTREMELY important to have a home inspector complete a thorough inspection before the Act of Sale (more on that in another post.)   

Many people, or in our case usually our office will negotiate a warranty in the sale of the house and order it for you, buy a one-year home warranty plan right when they close on a home, since such protections can provide some much-needed peace of mind that you won't get hit with unexpected, out-of-pocket expenses soon after moving in. Imagine what a bummer it would be, after all, to wake up one morning to a broken boiler, knocking appliances, a leaking water heater, dripping plumbing, or malfunctioning fridge in your new home.

What Does a Home Warranty Include?

The specifics of what a home warranty covers can vary a bit depending on the specific home warranty plan you purchase and the warranty company you contract . In general, though, home warranties are designed to cover major systems and appliances within the home. When you’re buying a home, your home warranty will have you covered if something like the refrigerator or water heater breaks down a few months after you move in. In most cases, major systems such as plumbing and HVAC are covered as well. The policy functions like most standard warranties, allowing you to get needed repairs or replacements while the warranty is still in effect.

What’s Not Covered?

Unless it’s specifically mentioned in your home warranty, general home repairs or other maintenance are not included in the warranty. This means that something like a broken window, a weak spot in the floor or peeling paint would have to be repaired as an out-of-pocket expense if they aren’t covered under your homeowners’ insurance. The home warranty is designed to cover only your new home’s appliances and major systems.

How Long Do Home Warranties Last?

Again, the term of a home warranty depends on the specific warranty policy you take out. One of the most common warranty periods is one year, giving you a full year’s worth of peace of mind after you take out the policy. Depending on your needs, however, you may be able to get a home warranty for shorter or longer periods as well.

Can You Add Extra Services?

Depending on the home warranty provider you choose, there may be add-ons that you can include with your warranty service for an additional cost. These can include things like swimming pool maintenance and repair, well maintenance and expanded services such as maintenance checks for your HVAC system. Some providers even use add-ons to create customizable warranty plans, offering up a basic general plan and then expanding it to meet your needs by letting you add only the features you want.

Do You Need a Home Warranty?

Whether you actually need a home warranty or not is kind of a big question. The answer depends on a lot of factors including the age of the home that you’re buying, the amount of coverage you get from your homeowners’ insurance and even what you have in the house that would be covered by the home warranty. The price of the warranty plan should also be a consideration, since this can vary by several hundreds dollars depending on the provider and the amount of coverage included. The right home warranty can be a good buy, yet it’s worth looking at the cost and coverage to make sure the plan is actually what you need.

Solid Home Warranty Advice

A home warranty benefits homeowners by providing reassurance that they can move in without worrying about shelling out even more for add-on or surprise repairs.

A home warranty can also benefit home sellers (if they don't have it already), since it can cover these elements during the listing period; some home warranty companies even offer free seller’s coverage during this time with the hopes that the buyer will decide to continue the coverage. Often, home sellers will offer to pay for the first year of a buyer's home warranty to entice buyers to bite.

However not everyone thinks home warranties are worth the cost. Typically a warranty isn't necessary with new homes, since most of the appliances are already covered under manufacturers' warranties, personally I think they can still be valuable even with a new construction warranty. Yet in general, the older your home, the greater the odds that something's bound to break, and the wiser it is to get a home warranty. Best of all? Not all home warranty companies differentiate between newer and older homes in terms of cost, making a warranty an especially cost-effective option if you are purchasing an older home.

Be sure to read the fine print on the contracts from a warranty company to better understand the process of claims and coverage or ASK ME, and I'll be happy to chat with you or put you in touch with our preferred, local warranty expert  Mr Webb Wartelle  And remember, this type of warranty doesn't usually cover pre-existing conditions and you may have to pay a deductible if something breaks. Another thing to remember is that a home warranty does not mean you're off scot-free for a certain "covered item." Typically you'll have to pay for a service call, service fee, or part of the bill up to your home warranty deductible first.

If you want more information on home warranty companies that serve our area, or if you have additional real estate related questions, you can always reach me at Stephaniegras@kw.com or Stephanie@thewilliamsteam.com 


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