Here is what you need to know about home warranties.
1. They’re available with or without your real estate agent. The logical person to turn to for a home warranty is your real estate agent. She can connect you with companies that provide warranties. Oftentimes, agents will recommend warranties to sellers as a way to attract buyers to a home. You can also find a home warranty by conducting an Internet search or by perusing a local real estate sales booklet. Buyers can also get coverage on their own.
2. You call one number and only one number. If something breaks in your home and you are new to the area, do you know whom to call? No worries. If you have a home warranty plan with a provider like Choice Home Warranty, all you need to do is call them and they will send out a repair technician. You should know that the technician will attempt to repair what is broken instead of replacing it.
3. Costs and coverages vary. There is no “one size fits all” plan for a homeowner warranty. Companies typically offer multiple plans with a variety of coverages and prices. Plans can vary from state to state and coverage terms may differ especially if state law requires the same. Typically, you’ll find at least three levels of coverage with incrementally higher pricing for the better plans. Basic plans may not include appliances while full plans may offer premium coverage to include plumbing and supply lines.
4. Trip charges apply. Pay $500 for a home warranty and you’ll get a bargain right? Well, yes and no. Your up front cost is fixed, but each time you place a service call, there will be a trip charge, what can cost you $55 to $75 per visit.
5. Certain items may be covered separately. Even with a variety of plans to consider, you may find some differences with one company offering coverage for a swimming pool or spa and another company charging extra for that benefit. Often, you’ll find plans where items can be added cafeteria style — such as a deck, septic tank or for a standalone freezer. You choose what you want and nothing more.
6. A policy may be renewed or transferred. Depending on your state’s consumer laws, a homeowner warranty could be renewed at the prevailing rate when it expires. If you should sell the property before the warranty expires, you may be allowed to transfer the warranty to a new homeowner. Check the warranty contract terms.
7. Cancellation may be allowed. Some states allow homeowners to cancel their warranties and receive a refund. Your state may require a pro-rated refund based on the unused months in your plan.
Home Warranty Considerations
Is a home warranty right for you? That’s something you’ll have to decide. Your local housing market notwithstanding a warranty may help seal a deal, a small investment in the grand scheme of homeownership.
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