Geek Speak: Home Warranties
What’s the scoop with home warranties? Are they important? Do I need one?
Unlike a manufacturer’s warranty that covers an appliance for a certain amount of time, or a homeowner’s insurance policy that protects a home against catastrophic damages, a home warranty provides coverage for day-to-day breakage due to normal use.
A home warranty doesn’t expire–the plan can be renewed year after year. Coverage can extend from appliances like dishwashers and water heaters to whole-house systems such as plumbing and electrical. Terms and limits vary by company and some offer additional coverage for specialty items like pools or wells. One of the companies we work with even covers the cost of re-keying an entire home–a huge benefit for a buyer right after a move.
Who Buys a Home Warranty?
That depends. In a competitive market, sellers may include a home warranty in the purchase price of their house. If buyers have concerns about dated appliances, they might ask a seller to include the coverage as part of the purchase agreement. Home warranties can also be purchased directly by a homeowner. They don’t have to be part of a home sale.
Peace of Mind for Buyers – As a buyer, there’s comfort knowing that if something goes wrong, you won’t be out the expense of having to replace or repair an item in addition to all of the other moving and closing expenses.
Attractive Advantage – If a buyer is undecided between properties, the addition of a bonus like a home warranty may provide the deciding factor between homes.
Limited Liability – With a home warranty in place, a seller won’t have to worry about an appliance giving out and having to come up with the extra funds for replacement while their home is for sale.
If you’d like more information about home warranties, contact on of the geeks or tune in for this week’s episode of Grill The Geeks on The Property Geeks Facebook page where we’ll be talking to a colleague of ours who works for a home warranty company. We broadcast live every Thursday at 12pm Central time. Hope to see you there!