Safeguarding one’s investment is paramount for new homeowners. Enter the realm of home warranties—a powerful tool that bridges the gap between unforeseen repairs and peace of mind. Tailored specifically for buyers, these warranties serve as insurance against costly malfunctions or defects in home systems and appliances.
Unlike traditional homeowner’s insurance, which covers damages from unexpected events like fires or theft, home warranties focus on the wear and tear of pivotal home components, ensuring they function optimally. With varying coverage options and service agreements, understanding the intricacies of home warranties is essential for buyers aiming to protect their assets, manage their budgets, and enjoy the serenity of a well-maintained residence.
Home warranty companies generally cover any repair costs while the property is listed or in escrow, and then transfer ownership once sale closing occurs.
Home warranties can be an attractive incentive for buyers and help speed up the selling process, but before making your choice it is crucial to read sample contracts and compare customer reviews. But, is a home warranty strategy worth it? Read on to find out.
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Cost
Cost of home warranties depends on their level and type of coverage; according to American Home Shield, plans can range anywhere from several hundred dollars up to over $1,000 annually, which includes both monthly or yearly premium payments as well as service charges from technicians coming out to inspect the situation.
Companies often set caps on how much they will cover for repairs; you are then responsible for covering any expenses beyond this threshold. Care should be taken when reading contracts to understand these limitations.
Home warranties can be an attractive selling point in an increasingly competitive real estate market, providing both buyers and sellers peace of mind during a sale. Buyers should work with their real estate agents to research home warranty providers and options prior to making their decision. Roxanne Downer brings over 15 years of news, finance, and lifestyle writing experience having written for publications like Deutsche Bank, BNY Mellon, and Financial Week.
Peace of Mind
Home warranties provide peace of mind to prospective homebuyers and new homeowners, especially first-time homeowners. With their protection in place should something go wrong in their new house, they know they won’t have to use up emergency savings funds or pay out-of-pocket for costly repairs if anything does go wrong.
Buyers also benefit from having access to pre-vetted contractors provided by home warranty companies, making the search for reliable professionals easier. This service may be especially useful if the buyer is unfamiliar with the area or doesn’t already have a network of local professionals they can call upon for help.
As with any purchase, it’s wise to shop around and compare prices before signing a home warranty contract with any provider. Consumer reviews, the website of your state attorney general, and sites like Better Business Bureau can all serve as invaluable resources when searching for home warranty providers that match up well with buyer needs and budgets.
Coverage
Home warranties provide essential protection from expensive, unexpected repair bills while giving buyers peace of mind. As coverage varies depending on which home warranty provider is chosen, it’s vital that potential homebuyers do their research prior to making a decision. Start by gathering quotes from multiple reputable home warranty companies before carefully reviewing sample contracts with particular attention paid to cost caps and exclusions clauses.
Home buyer warranties can be purchased at any time, though the most popular way to do it is in conjunction with the sale of property. When this occurs, the policy transfers from seller to new homeowner upon closing.
Homeowners frequently include home warranties as a marketing incentive to draw homebuyers to their closing deals, with policies typically being cancelled at no cost to the seller once their new buyer takes possession. Therefore, homeowners should carefully research all their options and select an affordable provider that provides comprehensive coverage at an attractive rate.
Customer Service
Home warranty companies typically offer customers an 800 number to contact for service requests or coverage inquiries, as well as online access to their account Message Center where they can monitor requests or submit new ones.
Before purchasing a warranty plan, buyers should do their research on the company offering it. A reliable exclusive buyer’s agent can explain the costs and coverage details of such an agreement.
Home warranties may not be necessary for every buyer, but they can significantly lessen the stress of purchasing a house. With down payments, closing costs, inspection fees, and other associated moving costs to consider financially, it can be daunting trying to budget for unexpected repairs or replacements that arise after moving. While sellers or real estate agencies may offer warranties as part of the sales process, buyers can purchase individual plans themselves that cover appliances that wear out over time or systems that become outdated from usage.