What is a Home Warranty and should you consider purchasing one? Well, I’ll explain what a Home Warranty is and you can decide if it’s a good fit for you.

What a Home Warranty Is Not

A Home Warranty is different from a Homeowners Policy. If you’re getting financed, your lender will require a Homeowners Policy. A Homeowners Policy covers major perils such as fires, named storms, wind damage, hail damage, etc.

So What is a Home Warranty?

The Home Warranty is an optional service contract that can be purchased usually for a one-year term. A Home Warranty usually covers Heating and Air conditioning systems, Plumbing, Electrical systems, and Kitchen appliances. Policies differ depending on the company so make sure to read the fine print when choosing a plan. You may want to add-on specific coverage to tailor the plan to fit your needs. **Make note that the warranty will only cover systems and/or components that were working prior to your moving in.** In other words, if you know the Range/Oven is not working you cannot ask the warranty company to come and fix and/or replace it after you take possession of the home.

Who Pays for the Home Warranty?

That depends. If you would like, we can ask the seller to purchase the one-year policy for you when we submit the offer. If they do not agree, you can still purchase the policy yourself. I can order it and get the information to you at or before closing. Alternatively, we can wait and ask the seller to purchase the home warranty when we respond to inspections. Sometimes it takes the report from a licensed professional to show the seller why it’s important to have this coverage. We can talk about this more when it comes time to place the offer.

How Much Does a Home Warranty Cost?

There are a few factors to take into consideration like the square footage of the home and what components you want covered. Usually the cost starts around $475 and can go up over $700. If a covered system or appliance breaks down due to normal wear and use, then you will pay a service fee when the technician arrives at your home. The service fee is usually between $75 and $150 depending on the company you choose.

What if an Appliance Can’t be Repaired?

Generally, the service tech will attempt to repair the covered system or component first. If it cannot be repaired, then they will order a replacement according to the terms and conditions of the plan. They may not replace the exact model or even the same brand but a customer service agent can answer your questions and advise you on what your options are in this case.

Where Do You Buy a Home Warranty?

There are two companies that I have worked with in the past. Old Republic Home Protection and American Home Shield. I would recommend visiting both sites and familiarizing yourself with their coverage plans. If you decide that you want coverage just let me know which company and plan you desire and I will order it for you. If you find another company that suits your needs better than the ones listed above, please forward their information to me so I can order the plan.

What Else Do You Need to Know About a Home Warranty?

I will give you a heads up right now… A home warranty is not a fast service. It definitely helps offset some costs associated with malfunctioning components of your home, but it will take time to get a service technician to your house.  If you want peace of mind knowing that you have a back-up plan should a covered component break, then it may be worth the wait. But study up and decide what works best for you. I’m sure you know the old saying “More Money or More Time”? If you want fast service, then the Home Warranty may not fit your needs. (Think: AC breaks in the middle of July) But if you have more time than money and can wait (aka sweat it out) then you can certainly save some money with a Home Warranty.