Buying a home is arguably one of the largest purchases a person will make. It can also be one of the most stressful. Individuals take quite a financial leap when buying a home. Even after careful consideration of funds and budgeting, it’s easy to become overextended. A home warranty can take some of the bite out of unexpected expenses.
Although home buyers are urged to hire an inspector and check a property and structure from top to bottom before signing on the dotted line, a home inspector cannot foresee everything that may crop up after a person moves into a home.
“When my home inspector reviewed the property he found only minor things that needed attention,” says Jeannine in New Jersey. “After Imoved in, we shortly learned that the crawl space had flooding issues that would require a lot of money to fix properly.”
Home warranties can be a smart investment that take some of the financial pressure off of new homeowners. They can also be negotiated into the sale terms of the home so that the seller is responsible for providing the warranty to the new buyer.
Home warranties do not negate the need for homeowner’s insurance, but they can add protection against large monetary pay-outs to repair many items around the house. Policies may differ as to specific coverage, but most home warranties will cover major systems of the home, such as heating/cooling, plumbing, electrical, as well as certain appliances.
To decide if a warranty is the right investment, home buyers should consider the following:
• Home warranties are only as good as the company backing them. Careful investigation into the trustworthiness of the warranty company and its track record should be completed.
• Read the fine print of the warranty. Learn what exclusions exist, which may not make the warranty practical.
•Keep in mind that the warranty company reserves the right to determine if a repair or replacement is adequate in a claim situation.
• In general, warranty companies work with their own set of contractors. This means a homeowner may not be able to hire his or her own preferred contractors to do work.
• There may be a deductible or a fee charged prior to having a technician assess a repair situation.
• The warranty company may require inspection of the house to be sure items are in good working order before offering a plan.
• If a warranty is offered through a home seller, there may be no negotiation on the coverage or company used.
Home buyers should keep in mind that there are many unforseen expenses that can arise when purchasing a new home. Having some additional protection, such as a home warranty, could mean saving money on outof pocket repairs.