|
Buyers commonly ask if the home warranty being offered
by a seller is a “good deal.” Considering that the average furnace repair is between
$1,250 and $5,000,* a home warranty may save you dollars on a repair
that pops up after the closing. In addition, the money you save by
not having to foot the bill for the policy—which on average can cost
between $300-$400—makes a warranty a worthy perk.
You should be cognizant, however, of exactly what the home warranty
covers. Most sellers only purchase a one-year basic warranty, which
will generally cover major built-in appliances and mechanical systems
such as heating, electrical and plumbing, and usually it only covers
normal wear and tear. For example, if the water heater was not in good
working condition when the home was purchased, and it breaks a week
or two later, there is no coverage.
- If you want more extensive coverage, such as for pool equipment,
air conditioning, or even the refrigerator, talk with your real estate
professional about negotiating that extra cost with the seller, or
consider purchasing your own warranty. Also, remember that although
most home warranties provide coverage only for one year, most plans
are renewable.
- Whether or not you are given the option of selecting your own home
warranty provider, here are questions to consider:
- How much is the deductible or per visit cost for repairs?
- Does the plan cover “pre-existing conditions” which weren’t
known to the seller?
- Who performs the repairs? Can you choose someone or does the company
send a technician in their network?
- What’s the maximum dollar amount for repairs and
what are the policy limitations? For example, will the policy pay
for a new water heater
at no additional cost?
Whether a warranty is offered by the seller or not,
no buyer should forgo a home inspection. An inspection may uncover
defects or potential
problems that won’t be covered by the warranty—and may give you the
opportunity to request the seller to make any major repairs before
the closing.
But, warranties definitely have a place when it comes to protection
and peace of mind. Contact your real estate professional for more information
on home warranties and providers.
*Based on a nationwide survey of HMS National’s
(a home warranty provider) independent network of service technicians.
|
is
a service mark of The Prudential Insurance Company of America. 
Equal
Housing Opportunity. Equal Opportunity Employer
