Many homeowners do not realize the benefits of having a home warranty on their property. A home warranty is a contract between the homeowner and a warranty company that provides repairs and replacement services on a home’s major components including heating and air systems, plumbing systems, pools and spas, and major appliances.
Both a resale home and a new construction home can have home warranties.
What a home warranty looks like for a new home.
Reputable developers of new construction will often back up their own work – and it should be a major criteria if you select to purchase a new home. Typically the home builder will provide a door-to-door warranty for one year on nearly everything in the home. This often includes the warranties that come from the manufacturers of the brand new appliances and systems placed in the home. The home builder might also extend the warranty to five or ten years for specific home components, like the roof, hardwood floors, or fireplaces. It is important to know exactly what your builder will cover when you are buying a new home, so get the information from the site agent, or ask your REALTOR® to help gather that information.
For a Resale Home
Unlike a new home, which will cover a lot of items including expensive structural issues, home owner warranties for previously owned homes are actually service contracts. These service contracts will cover any costs to repair or replace a broken appliance or plumbing system over and above the deductible. Homeowner warranties will not cover pre-existing problems. So if an appliance works on the day of the closing, it’s covered; otherwise it’s not. These warranties don’t cover everything in your home, specifically structural problems.
The typical policy covers the furnace, air conditioning, kitchen appliances, water heather, trash compactor, electrical system – often limited to fuses and interior wiring, and interior plumbing. There are exclusions and these should be discussed with the home warranty company.
Discuss adding the cost of a home warranty to the buying contract with your REALTOR®. Also, you as the homeowner may purchase a home warranty at anytime. Your REALTOR® likely has a few companies to recommend, so it’s a great idea to reach out for recommendations.