I'm in the process of buying a home and am unsure as to whether or not a Home Warranty is a good idea.

If something major were to break, I would be hard pressed to come up with the money to fix it. But am I just throwing money down the drain with a warranty?

Anything misleading about a home warranty? Such as certain things that you would think they pay for but they don't?

Any advice or sharing of past experiences would be much appreciated!

I believe on balance a home warranty is generally a good idea especially on a resale house.

Most provide some degree of protection for the mechanical systems of a home, i.e. HVAC, appliances, plumbing, and electrical systems.

The cost of a major repair to one of these systems could be significant especially during your first year of home ownership when lots of buyers have spent a lot or all of their available cash just to buy the home and move in.

It's always an option to ask a seller to provide you with a warranty in an offer to purchase; the initial cost is fairly modest and a good 'carrot' to offer a buyer as an inducement to purchase.

It also could remove some potential liability issues from both sellers and any agents involved.

The home warranty company my firm uses, http://www.hmsnet.com/ sends us notifications each time a warranty we've been involved with is used which also make a reason to contact the homeowner on a positive note to ask for referral business.

I always stress the importanct of the home warranty to both my sellers and buyers. If a listing I will often get the seller to provide the 1 yr warranty as an inducement for the buyer.
If I am working with a buyer and there is no warranty on the property I will suggest that the buyers either ask the seller to pay the 1 yr warranty or failing that they buy it themselves.
For most people the purchase of a home takes most of their funds for closing and leaves little if something major should go wrong in that first half a year.
Consider this but a water heater is in the $500 range, AC can be at least $1500-$2500 do the math if you have doubts of the benifits of a home warranty.

I agree with Paul. The warranty will not only releive some potential liability, but consider this.
If the was a problem,and lets say the HVAC or water heater went kaputz, and you wanted to sue for non disclosure, How much money would it cost for an attorney, filing, and the time involved? Seem like the $295-$300 is worth that protection.

Hello
I try to use balance. Depending on the age of the house, when the major applicance have been last replaced, from home inspection report the condition of the house will tell a lot also.

Ritu

Warranties can be a very handy to have when purchasing a property. The key is to completely understand the role that a warranty plays.

For a property that has obviously not been maintained, a warranty is not going to be the cure to getting it fixed. Whenever maintenance is in question, have the system in question checked by a certified technician.

Warranties coverage is excluded on systems and appliances that have not been properly taken care of by the new or previous owner. Provided that understanding is in place, a warranty can give peace of mind that unexpected expenses will not be incurred.

Most warranties run in the neighborhood of $400-$500. Considering that there is a 68% likelyhood of system failure in the first 90 days and the average repair being $1085, the cost of a warranty is usually a pretty good investment.

Regardless, a warranty's value is best determined by understanding what it covers and excludes. Your Realtor should be able to give good advice on this matter.

Regards,

Roger Sargent
Account Executive
American Home Shield

Hey Roger welcome aboard, glad to see you on agents online. Hey folks this is the man to ask any home warranty questions he is with the largest and best home warranty co in the US and I refer all my bus for home warranty's his way

ok great...question. My broker told me to that I had to make sure that my buyers purchased Home Insurance and that we cannot close on the deal without it. Seller has a warranty included in the listing. I am confused since im new Can you give me the difference between a home warranty and home insurance,

Are you seriously asking the difference between Home Owners insurance and a Home Warranty?

Do You Own a home of your own? If so I am sure you have home owners insurance, if not then maybe renters insurance.

GA Newbie, what company do you work for?? Did the buyers not Know the difference either?
Did they ever here of PITI from thier lender?
Principal, Interest, Taxes and oh yes.....Insurance!

A home warranty is basically a service contract for appliances, air conditioning, heating, pool etc. If something breaks, they fix it. Home owners insurance however, covers actual structural and physical problems as well as coverage for items within the home, and the house itself. If there is a broken dishwasher, call the warranty company. If there is a fire, call you insurance. It is a great idea to have both. It may seem like a waste of money, but when the time comes you will be glad you got it.

How many of us advocating residential service contracts (they're not really "warranties") actually have them on our own homes? You don't need to have just bought the home to get one.

The warranties on newly built homes are not worth it IMO. This may be very different from the service polices. I know one difference is that new home warranties don't cover your appliances and such, they're meant to cover construction only. the problem is, they don't really cover much of anything.

New home warranties have many exclusions for one thing. Most claims are denied, and any disputes the home owner chooses to pursue after denial have to go to private arbitration, often with an arbitrator already determined by the warranty co.

I have one of these 10 year structural warranty policies now and had one in the past on another home. They just come with some new homes like a fixture. Any policy the buyer is shown is not the one they'll get after closing and be bound by. Most states don't regulate warranties or if they do, it's so pathetic they may as well not, so they do things insurance co's can't.

IMO the warranties on new homes only serve to complicate construction defect cases for the home owner. Even some builders don't like them, but the ones that DO like them are the builders that have no intention of honoring their own requirement to cover everything the first year. The warranty co's don't seem to worry about whether the builder is any good because they never had any intention to pay valid claims anyway.

I certainly hope the service policies you're talking about are not like new home warranties!

Uxor,

All new construction warranties are not created equally. It pays to shop around and appliances are not always covered because they have the appliance warranty provided by the appliance manufacturer.
The 2-10 that I spoke of has a 2 year warranty on internal systems. So if you do you homework you can find good warranty products.


Jason,
I have purchased a home warranty on all of my single family properties. It is 409 well spent dollars. The $75 deductible is really nice as opposed to that $500 water heater replacement bill. Last claim I made was for a new AC unit and again $75 beats $1500. You are probably right that most agent never bought warranties on their own properties just as most agents do not invest in what they do for a living something I have never understood.

Well, it pays to shop around. Many of the sellers I've dealt with had no hesitation in throwing the warranty in as a bonus to the buyer. It is good assurance, but not necessary. Warranties do not necessarily cover major items.