When buying a home, especially a resale, there are a lot of unknowns. How do you know everything is working properly? Sure, you’re going to do your due diligence and get a home inspection done by a certified inspector. But the Inspectors’ job is solely to determine if the homes’ different systems and appliances are working properly at the time of the inspection. The inspector cannot make any guarantees about the working order of them after you’ve closed and moved into the home. That’s why it may be a good idea to look into a home protection plan or home warranty.
Who provides?...
It is not uncommon for sellers to enroll a home warranty and pay for the protection as an incentive for potential buyers. Be sure to ask your realtor if this is the case when considering a particular property. If not, you can certainly ask for one as part of your offer. If the seller refuses to pay for the warranty, simply ask your realtor how to get one. He or she will be able to provide you with some options and even enroll the warranty for you. Most plans range in price from $300-500 for a one year policy, depending on coverage and trade fee selected, and can be paid for as part of the settlement.
What is covered?....
It’s important to understand the plan. First, you’ll want to know what all is covered, and second, what the limits of coverage are for each system or appliance. For example, most common appliances (i.e. refrigerator, microwave, dishwasher) and systems (electrical, plumbing, HVAC) are covered. Typically there are limits of coverage (i.e. up to $1500 towards HVAC repairs), and you’ll certainly want to know what those are. For other systems or appliances (such as pool or spa equipment, well pump, etc), coverage is optional, and may available for an additional cost.
How does it work?...
After you’ve taken possession, if you have an issue, or something malfunctions in the home, always remember to call the home warranty company provider first. They have preferred contractors and will need to schedule the service call for you. Once the contractor is scheduled, they will come and assess the damage or needed repair and send a diagnosis, along with a quote for repair or replacement, back to the warranty company. The plan provider will then authorize the contractor to order parts and complete the repairs. Typically the trade fee, which is the same as a deductible in the insurance world, will be the portion you pay directly to the contractor before any parts are ordered or repairs completed. With most policies, trade fees range from $50-100.
How can I learn more?...
Keep in mind that your Realtor doesn’t work for the warranty company and, although he may be able to answer general questions about how warranties work, you should thoroughly read over all of the warranty’s terms and conditions, and pose any questions to the plans provider directly.
Happy House Hunting!
Joel Sheesley
910.398.2222
Joel@BlueCoastRealEstate.com