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Significance of Home Warranty in Buying a Home

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By : Fredrica Smith    99 or more times read
As a home buyer, you would be confronted with multiple obligations that would especially require some money. But despite the expenses involved, the matters attached to home buying are definitely essential. One of the factors you have to consider is how sound the property is. You have to know whether the house you are looking into has an attached home warranty or you have to get one.

Basically this guarantee is a service plan that covers repairs or replacements of some parts in the house. The typical warranty includes repairs of mechanical and electrical systems or appliances such as the furnace, air conditioner units, or other heating and cooling equipment. However, the damages should only be incurred due to ordinary wear and tear. There are two main warranty types – new and existing.

New warranties are commonly bought by many builders to attract many buyers. This is because this type usually covers ten years for repairing home components. The other type relies on the negotiation between you, the buyer, and the seller. You could both agree on buying a one-year warranty that is the same as an extended service contract. Buying this plan should be before the closing process and paid before the deal is finally closed. Any option of policy costs from $350 to $600.

But if the home is owner built, the seller should already have a policy attached to the property. The Home Building Act of 1989 stated that the seller who is also the owner and builder of the home should purchase the guarantee within six years of the construction completion. The seller has also the responsibility to divulge information that the home is owner built and the warranty is existent. If the home owner does not disclose such details, he can end up confronting losses. There are applicable fines for this neglect which can reach up to $22,000 and the contract can be terminated immediately.

The advantages of having a home warranty can be considered a necessity. This would prove to be beneficial once you move into your new property. In any chance you would find damages to some home components, you can be saved from major expenses of getting brand new replacements or massive repairs. The warranty can give some sense of security as usually with one call to the warranty company, they can immediately send a contractor to check the concerned areas. You are also saved from the stress of finding a serviceman that can do the job professionally.

On the other hand, you also have to be cautious about the down sides of this insurance policy. Although the company would shoulder the repair costs, there are many instances that you still have to disburse cash right away. Say, the damaged item is included in the policy but the way it was broken has been due to another method excluded in the contract, such as rusting or poor maintenance. You would then have to pay for the repair expenses plus the service-call fee of the contractor. The latter expense can range from $50 to $100.

Given the positive and negative points of getting a home warranty, being meticulous in purchasing the plan is crucially vital. Prior to signing any contract, review the details of the guarantee. See whether the coverage, both the timeframe and included home items to be repaired or replaced, fits your preference and needs. Be particular in giving attention to this common contract clause, “We reserve the right to provide cash in lieu of repair or replacement in the amount of our actual cost (less than retail) to repair or replace such item.” Inquire about this matter point by point as some companies calculate the amount discounted very low.

Checking on the credibility of warranty companies would be helpful as well. Web forums by home owners, online articles and warranty provider review sites could guide you in assessing the service and coverage of such companies. You should also try to visit company websites so you can have an overview of their track record, services offered and other essential information about their business practices.

Find out as soon as possible whether the property you are looking into has an attached policy or you would be required to buy one. In any case, a home warranty is really needed so that you can benefit from the convenience and security it presents.
The Real estate market can be an enjoyable, satisfying and lucrative experience for you. Whether you are a homeowner, a buyer, a landlord or simply a real estate enthusiast, get to know more about the latest in the real estate market now. Read more about it here: Payson, AZ Real Estate Properties, Payson Riverfront Homes and Townhomes for Sale in Payson.

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