Owning a home is always an exciting milestone. Still, with all of its many intricate components and natural wear and tear over time, there’s no shortage of potential issues to worry about.
However, it pays off to be prepared – perform due diligence beforehand to start your journey as a homeowner stress-free.
Buying an old house can be a cause of concern, but with the help of home warranties, homeowners find comfort and protection.
Real estate brokers or previous owners often provide these plans, ensuring that any hidden issues are addressed without causing a financial burden to buyers.
A home warranty can be a great asset to have. But what is it exactly, and what does it cover?
When buying or selling a home, many are given the option of purchasing a home warranty. This can give both parties peace of mind by providing protection from significant issues in their property’s systems.
It’s not insurance but has similar benefits and is an essential consideration for any real estate transaction.
“A home warranty is a contract that offers coverage for a specific set of repairs,” a Realtor with Providence Group Realty in Plano, Texas, Sam Thomas, stated.
“While it is not insurance, it feels like insurance in many ways, along with a deductible, coverage limitations and exclusions. Covered items generally include plumbing, electrical, appliances, and HVAC. Additionally, many companies offer extended coverage for pool equipment and other items such as an extra fridge in the garage.”
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The Difference between Home Warranty and Other Warranties
When you’re in the market to purchase a new house, it can be easy to get overwhelmed by all of the unfamiliar terminology and similar-sounding jargon. It’s important to familiarize yourself with these concepts early – action often happens quickly when purchase decisions need to be made.
Homeowners insurance and home warranty coverage sound similar but offer distinct protections. Knowing the differences can help first-time buyers make an informed choice when selecting their coverages.
“Unlike homeowners insurance, which protects you from the costs of damage to or destruction of your home, a home warranty protects you financially from repairing appliances and key mechanical components in your home, like the hot water heater and air conditioning units,” Realtor and founder of Las Vegas First&Sold, Travis French, said.
“The advantage of a home warranty during the real estate transaction is that the plan goes into effect immediately. In contrast, plans signed up for after closing typically have a one-month grace period before a claim can be filed.”
Home warranties are distinct from the guarantees that come with buying a new home.
These assurances typically originate directly from both your builder and the suppliers of materials used in constructing your dwelling, making sure you get only quality craftsmanship in all aspects of construction.
Select a Good One
When it comes to a home warranty, many homeowners often need to learn that they have the freedom of choice.
Instead, Realtors and brokerages may offer one option or another that could arrive in your mailbox as an unexpected proposal – but it’s important to remember there are more options available.
If you’re looking for more than basic coverage, take the time to research home warranty companies and discover which one is perfect for your needs. With so many options out there, it’s worth spending extra effort to receive the best possible service.
When it comes to buying a home warranty, knowledge is power.
Be sure to read the fine print and understand what’s included in your plan – and more importantly, what isn’t. Doing so will save you money (and headaches) over time since unexpected repair expenses can quickly add up if outside of coverage.
Helps Both Buyer and Seller
A home warranty is essential for purchasing or selling an older home with aging systems such as HVAC, plumbing and electricity. Although drawbacks exist in this type of protection plan, it can still provide valuable services when dealing with aging properties.
For new homeowners, the possibility of a large appliance or system failing soon after closing can be daunting.
So, a home warranty gives buyers peace-of-mind knowing that covered items will be repaired if they break down during the term, ensuring their move into their dream home is worry-free.
“As a seller, offering a home warranty to a buyer helps to ease their concerns during the home inspection and repair request process,” French stated. “This potentially saves money on repairs and reduces the risk of cancellations.”
When it comes to selling a home, having the extra assurance of a warranty can be invaluable. Not only does it provide security for both parties involved in the transaction, but it also shields sellers from potential legal issues down the line.
When selling a home, a warranty can be used to provide an added layer of protection. Sellers often purchase them to safeguard against costly repairs while their homes are on the market – and buyers, too, may receive warranted coverage as part of their transaction.
“While your home is listed for sale, a home warranty will provide peace of mind if something breaks while the home is on the market,” Muckle said.
“Additionally, you can transfer it to the buyer when the home sells. I’ve had homeowners who purchased a home warranty when they listed their homes for sale. When the home inspection came back, they were able to get some of the items repaired through the home warranty.”