After diligently looking for a new house, you’ve found that special one – so exciting! When meeting with your Realtor to review the process and write an offer, it is important to discuss home warranty options. This is a great way to help protect yourself against potential repair costs for the first year of ownership. The cost ranges from $425 to $600. The seller will sometimes offer a home warranty when listing, but if not, there are a couple of possibilities – you could ask the seller to pay for it in your offer to purchase, or you can pay for it yourself at closing.
Home warranties give a peace of mind to many buyers and sellers. The main benefit of the home warranty is it covers repair costs for several items in your house such as furnace, air conditioners, appliances, plumbing and electrical – to name a few. Some sellers will take the coverage when the house is listed, and the home warranty passes onto the buyer at closing for a period of one year. Seller’s coverage is more limited, sellers need to take the additional coverage for furnace and air conditioning. This will cost about $75 and is added to cover the listing period up until the house transfers to the new buyer.
Your Realtor will have a marketing piece that communicates the entirety of the home warranty. Home warranties typically do not pay the full amount but will cover a percentage of the repair or correction. There is a deductible of $50 or $100 per call, be sure to be familiar with their coverage on the different items.
Different home warranty companies have different policies as to how they handle payment for repairs. Some companies require you to use their subcontractors. In an instance of a claim, you would need to make the call directly to the home warranty company and they will send one of their contractors out to assess the situation. However, other companies will allow you to work with a contractor you are familiar with – that contractor will have to call the warranty company before completely the job to find out what will be covered for that repair. It is essential you are familiar with how to file a claim with your home warranty company before calling a contractor.
It is important to note; the home warranty policies are renewable at the end of each term. Keep an eye out for a renewal notice in the mail or your email because they are time sensitive and require a quick response.
This is just a general overview on home warranties, each house is different. We are happy to answer any questions or talk more specifically about your situation, call us today to learn more.
You are on your way to home ownership – it is the best!