Home Warranties - To Buy or Not to Buy?
Often times an Agent, Buyer, or Seller will ask about after-market Home Owner Warranties, or HOW's for short. Will it help sell the house? Will it actually cover anything when needed? Well the simple answer is yes, and yes. There are now literally dozens and dozens of after-market HOWs ranging from $375 year to over $800 year and, in general, they do fill a need and provide some good benefits. So, how does it work?
If a covered home system or appliance breaks down or stops working, you call the HOW. The HOW gives you a list of authorized service providers and you then choose one and arrange for service. Depending on your contract coverage, your HOW will pay to fix, and/or replace and install the broken appliance. Most, if not all, of the plans do charge a small trade service fee (usually less than $100).
General coverage includes: l Air conditioning l Dishwashers l Doorbells l Furnace/heating systems l Water heaters l Ductwork l Garbage disposals l Inside plumbing stoppages l Ceiling fans l Electrical systems l Range and oven and more. There are also options for additional coverage for hottubs, swimming pools, and other items as well as discounts for extended time contracts, 18 months, two years, etc.
So if you're selling, and your home is a few years old or more, offering a Home Warranty may help the Buyer feel more secure and look twice. If your Buying and you need the extra security to hedge against future repairs you can negotiate this as part of the deal!
Here are some of the larger local Home Owner Warranty companies.
NOTE: Each plan has it's in own unique limits and inclusions/exclusions. The Annual “Premium”, alone, should not be considered the only comparison.