The National Association of Realtors defines a home warranty as “a service contract, normally for one year, which helps protect homeowners against the cost of unexpected covered repairs or replacement on their major systems and appliances that break down due to normal wear and tear. Coverage is for systems and appliances in good working order at the start of the contract.”
There are a few things to consider when exploring home warranties:
Peace of Mind
By insuring critical systems in the home, and should something go wrong with those systems, the cost of repairs is largely covered by the insurance company. This can save the homeowner a great deal of money, as repairs to crucial systems like HVAC or plumbing can be expensive.
A home warranty may also help sell a home, as it can provide peace of mind to potential buyers who know that if something breaks, they will not have to pay out of pocket for repairs. Sellers often offer a home warranty to ease buyers’ concerns over their first year in the home. In fact, in states where foreclosures are common, home warranties are practically the norm. If a buyer likes two homes about the same, a warranty can be a competitive advantage.
The Fine Print Matters
Warranties vary, so homeowners must understand what is and is not covered. For example, the home warranty can be a massive cost savings for big-ticket items like heating and cooling systems, often reducing out-of-pocket expenses to less than 10% of the total. However, with smaller appliances and simple repairs, the claim can cost you as much as the repair would on its own. Plus, it’s vital to know if the warranty will replace versus repair aging appliances.
Maintenance and Neglect
Occasionally home warranty companies will try to get out of paying for repairs or replacement by claiming you haven’t kept up with routine maintenance issues. To ensure you don’t get caught on these technicalities, understand how the insurance company justifies these claims.
You Can Shop Around
Not all home warranty companies are created equal, so do your research before buying. Talk to real estate agents about their experiences with various companies and ask for recommendations. Also, check out online reviews to get a sense of customer satisfaction levels. And finally, make sure you understand exactly what is covered in the policy.
When it comes to real estate, there are many things to think about – but whether or not to get a home warranty shouldn’t be one of them. Weigh the pros and cons and decide if a home warranty makes sense for you.
If you have any questions about where to get home warranty quotes for your Prescott, Arizona home, give Tim Anderson with Better Homes and Gardens Real Estate BloomTree Realty a call at (928) 308-9595. Tim has over 40 years of real estate experience and is an expert on real estate in Prescott, Arizona.
Tim Anderson
(928) 308-9595