June 18, 2024


Mad about real estate

Extended Coverage? Get a Residential Service Contract!

From the outside it may seem pristine, with a perfectly manicured walkway, lush green lawn, symmetrical yet inviting garden beds and blossoming young trees. From the inside, the same will appear to be true. The walls will be perfectly painted. The floors will be freshly scrubbed. You won’t find a spec of dust on a single appliance, in any given nook or hidden beneath a rug. It will be a shining example of the perfect home.

And then you’ll move in. Things you didn’t realize were there will rear their ugly heads, in the form of a mechanical breakdown or trembling body. The house will go from a perfect example of the perfect home to the perfect example of a dilapidated structure. You’ll be scrambling to make repairs, signing checks and handing over credit cards at every turn. You’ll find yourself paying more after the purchase than you did during the purchase, unless, of course, you thought to purchase a home residential service contract.

Residential service contracts are essentially insurance policies on your new house. They can be bought to cover the first year you own the home and will pay for any huge mechanical failures of a major system or appliance and any major repairs. Generally you pay for them during your closing, adding to the cost of your down payment, and can be obtained through your real estate agent. But are they worth it?

You may think not, after all, you’ve had your home inspected and it’s fine. You know plenty of people who didn’t experience a single mishap when they purchased their houses, why would you be any different. You don’t need to add to the price of your house with a needless extra tagalong. But, maybe you do.

You may not have any major problems in the first year of your homeownership – nothing may blow up, no pipes may burst and no roofing tiles may crash through the ceiling – but at least you’ll be able to rest easy knowing that if something does go wrong you can easily fix it. And should you experience the worst, you’ll be able to take care of it with little concern over how this cost is adding to what you have already spent buying the house, furnishing the house and moving all of your things into the house.

It’s nice to think that the home you’ll fall in love with will have no skeletons in the closet, but it’s simply not reasonable. An error can be missed or hidden; something can go drastically wrong in the days following your inspection. Something no one foresaw can suddenly occur, and you can suddenly not have the funds needed to pay for it. Don’t make what may be a bad situation worse by ignoring the need for a residential service contract. Buy one – it’s a little extra at closing for a lot of peace of mind in the end. It’s your sanity in an insane, whirlwind of a year known as the first in your journey toward home ownership.