Is your new home covered?
There are basically two types of Home Warranties. The end of builder’s warranty that comes with a newly constructed home and the type of home warranty you buy for pre-owned homes. We’ll be talking about the pre-owned home warranties in this article.
The views in this article are my opinion based on my experiences with my own home and the information I’ve received from our clients and other real estate professionals. This article isn’t intended to be Real Estate or Legal advice nor should it be taken that way. If you need that type of advice, there are numerous resources to help you including Real Estate Agents and Attorneys.
What is a home warranty?
There are many companies that sell home protection plans or home warranty plans. These plans are intended to insure and repair major components. Every plan and company may be a little different so please read the fine print.
To summarize it the warranty is purchased for property “x”, property “x” then has a failed furnace so the warranty company picks up the tab completely or partial depending on the program chosen. In theory it’s a great plan and we have had many satisfied buyers purchase these programs and had success with claims both large and small.
Where do I buy a home warranty?
Typically if you are buying a home through a real estate agent they will have a list of companies they use or could suggest. Sometimes you may even see a home for sale that comes with a warranty as the seller will purchase this to make the home more attractive.
What does a home warranty cost?
This will depend on what you’re covering. A 2 bedroom, one bath, 1,500 square foot home will cost less than a 4,000 sq foot 4 bedroom, 4 bathroom home will. Do your research but I have seen these home warranties range from $250 – $500.
To good to be true?
Can you truly buy a $200,000 12 year old home and have everything warranted for a couple hundred bucks? The short answer in my opinion is maybe.
Home warranties while they are great in many ways and again I have seen them work well you can also be victim to all the fine print. A furnace is a common failure, the warranty company may ask to see your receipts you serviced it every year as required, well most people don’t do that and there lies the possible loop hole. Just like any warranty you may find fine print that exempts the warranty company to do anything or they may call it a “pre-existing” condition.
The bottom line is people either love home warranties or they hate them, I have yet to see middle ground on the subject. Most people feel its relatively cheap insurance and proceed with it; others feel they will take their chance without. Either way home warranties are available to you and please read the fine print. If you have any further questions I can be reached at (612) 282-7653.
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