in

What is a Home Warranty?

Home Health Provider Aids Needy As Supreme Court Prepares To Hear Challenge To Healthcare Reform Law

A home warranty is an insurance policy that protects both the buyer and seller from the day a home is listed on the market until one year after the closing date. This type of warranty covers different types of household items and major appliances in the event they were to break down or have to be replaced.

Like all warranties, a residential warranty is mean to give some peace of mind to both the buyer and seller as it takes care of unforeseen costly repairs or replacement costs. For a homeowner who does not have a tragedy fund or they want to keep their emergency fund, a home warranty will act as a safeguard. It is ideal for people who are not handy or do not want to worry about hiring a contractor in the event of a predicament. These are the benefits of home warranties to the buyer.

A buyer will have the comfort of being protected. When one moves into a new home, there are a lot of expenses that have to be covered. You will be able to relax knowing that repairs will not be one of them.You are not going to worry about calling different vendors for repairs and estimates. You simply have to call the company you took the warranty with and they will arrange everything for you. They will select from their list of qualified and pre screened service technicians. The convenience of their service is going to be matched by the quality of the repairs.

The best thing with this warranty is that you are protected from the unexpected. The warranty can be renewed yearly so as normal wear and tear takes its toll on appliances and mechanical system, you will be protected.

In the event the company is not in a position to provide a qualified service contractor in a timely manner, they will approve the use of a contractor outside their service network. This is done so that you get immediate service that you need.

Sellers also benefit from home warranties. They are offered coverage while the home is still in the market. Mechanical failures will be covered during the listing period for a stipulated period of time. This means that in the event something was to go wrong, you can still continue to concentrate you efforts on selling the home rather than worrying about the repairs.
This is going to be a good marketing tool. Your real estate agent will tell you that most buyers prefer to buy a home which has a warranty. It is an added incentive that gives one the edge and sets your home apart from the other competition.

It also helps to prevent post sale disputes. In the event there is an unexpected failure in the home after the sale has been made, the buyer is not going to turn to you to solve the issue. It is therefore advisable for one to avoid the worry and inconvenience of having to deal with unexpected home repairs by getting a home warranty.

When looking for a home warranty company, you need to know the purpose of the warranty plan. Take some time to think of what you need the warranty to cover as well as your reason for buying it. Some people want it because it is ideal for improving the overall value of the home making it easier to get a good profit in the real estate market. If you are going to sell a house, it will be ideal to include a home warranty plan since most buyers are looking for home that include coverage of major items that might break.

Choose a company that covers as many appliances and systems as possible. Most plans will offer a wide range of plans and coverages for different systems and appliances. However, as you will be shopping for warranties, you need to compare the prices of the basic packages and then find the highest value package at a low cost. There are some hidden gems which are hard to find. Proper research is going to save you a lot of hassle further down the road.

Select a firm that specializes in the type of house that you own. There are different types of houses and each uses different systems. Older houses will need a lot of upkeep. Replacing an air conditioning unit that is ten years old is going to put a lot of strain on your finances. If the house you live in is older, a home warranty is highly recommended. You should however know that not all companies will cover an older home. It is therefore essential that you get a firm which covers the types, size and age of the house you own.

Another thing to consider is the cost of the warranty. Find out what the premiums are, if you will be paying them monthly or yearly and whether the price is going to increase after the first year. In the event an appliance breaks down and needs to be replaced or repaired, know if you will be responsible for the cost and if so, how much you are going to pay. All these questions are ideal to ask when you are trying to know the cost of a home warranty plan. Some firms will give you a quote online. You can choose to call a representative of the firm so that they can respond to your questions. Get a lot of quotes from different firms. This will help you to know which company is right for you.

When shopping for a home warranty plan, it is vital that you know how your plan works. You want the process to be simple and not complicated. It should be like this, when an appliance or a system breaks down, you call the home warranty firm and they call a service provider. The service provider will then get in touch with you to set an appointment. They will come and fix your appliance or system. In the event the system is irreparable, the service provider should inform the home warranty firm.

Photo by John Moore/Getty Images

Written by Brian McCaw

Brian is a lover of all things real estate including photography, architecture, news, and so much more.