How Important Are Home Warranties?

Buying a home is very exhilarating with highs and lows throughout the process. Young families purchasing their first home may see several homes before deciding. Older couples who are looking to downsize look to the fond memories of the happy moments with their children as they get ready to sell. Everyone has different needs and the last thing anyone wants are concerns about the systems of a home, whether you are the buyer or the seller.

 

How seriously should you consider a home warranty? Is it just another way to get more money out of you? For the seller it might not be that important. It does make for a good incentive for potential buyers to look at your home. The sellers may want to cover older appliances, plumbing and roofing systems. If they are aged they could present a problem for new home owners. Discuss this with a real estate professional. You might not offer it in the beginning but use it as a bargaining chip to sweeten the deal if it is needed.

 

When it comes to buyers the home warranty means peace of mind. It is good insurance for your greatest investment. The costs are very low compared to repair bills of a home’s systems. If in the first year you have an appliance go out the home warranty company will repair the problem or completely replace it. This could put a crunch on your money if this problem happens just after buying the home. You will likely invest thousands of dollars in closing costs, moving costs and some upgrades in the home. Repair issues could really hurt your wallet.

 

One experience I had was at a home for sale where our client had already moved out of town and the home was vacant. I came in one hot August Sunday afternoon to hold an open house and it was over a hundred degrees inside. I could hear the unit running but when I looked at the outside exhaust fan it was not turning and was making a loud squealing noise, almost deafening. I turned the unit off for about a half hour. I turned it on again thinking the unit might have frozen over or something like that. It did work when I turned it on. However, it only worked for about twenty minutes, and then stopped again. This condition is a killer to buyers. The hottest days of the year and the HVAC is not functioning. Luckily the owners had purchased a home warranty and it took care of the problem within a couple of days.

 

For real estate professionals, we understand the importance of a home warranty. We understand that with a buyer if there are problems in the first couple of months everyone gets blamed. The seller obviously knew it was a problem, right? The seller and their agent covered it up. I have heard it all. This also can reflect on the buyer’s agent as well.

A home warranty is important especially to cover the buyer. The buyer should purchase an independent home inspection to verify functionality of everything that can be seen. Then they should purchase a home warranty to cover the potential problems they can’t see. A good inspection will cost between $350 and $500. A home warranty will cost between $350 and $450. This is not much to pay to insure you are buying a quality home for your family.