Buying a home can be an exciting and freeing process. Many people enjoy the idea of no longer being dependent upon a landlord for the repairs and upkeep of their home. They also appreciate the freedom to make changes and truly enjoy their lives the way they want to.
Buying a home, however, is also very expensive. Even after getting a mortgage, there are a plethora of costs that must be covered before ever setting foot in the new home. On top of all that, there are the costs of actually moving in. In many cases, a breakdown of a home’s system or major appliances can be a major financial burden. Fortunately, a home warranty can help.
What is a Home Warranty?
A home warranty is a protection plan that can cover the systems and appliances of a home. These plans can be customized to include the heating, cooling, plumbing, and electrical systems. It can also cover the various appliances in the home. Homeowners can find the right options at 2-10.com.
Home warranties provide protection to prevent a home from grinding to a stop when something breaks down. A policyholder simply contacts the home warranty provider when there is an issue with a covered item in the home. They will help find a solution to fix the problem as quickly as possible.
Why Get a Home Warranty when Buying a Home?
Buying a home can be quite an expense. Once the new homeowner moves in, their household budget may be quite tight due to all the expenses that go into buying and moving into a new home. If an appliance or home system breaks down, they may not be able to afford that cost.
With a home warranty, those repairs are covered. Although there is some cost to the policy, it can be considerably less than the cost of repairs or replacing a major system in the home. This can ensure homeowners can keep their homes running without going broke.
How is a Home Warranty Different from Homeowner’s Insurance?
Homeowner’s insurance is often necessary for even getting a mortgage on a home. This insurance policy provides protection against unexpected events, such as fires, storms, or even break-ins. This insurance can even provide liability protections for any injury that may occur on the property.
Homeowner’s insurance does not cover when a furnace breaks down due to age. It will not cover the replacement cost of a refrigerator when it quits working. A home warranty, however, offers coverage for the repairs or replacement of these important parts of a home.
What Does a Typical Home Warranty Cover?
A typical home warranty covers the major systems of a home. This includes the heating and cooling units of the home. It can even provide coverage for the plumbing and electrical systems. The warranty will cover the costs of repairs or even replacements when necessary.
Many home warranties also cover the basic appliances of a home. This can include the refrigerator, stove, dishwasher, built-in microwave, washer, and dryer. However, these warranties are often customized for the homeowner to provide the best coverage possible.
What Options can be added to a Home Warranty?
There are a variety of options that can be added to a home warranty. These often depend on the appliances in the home and the needs of the homeowner. Additional coverage for appliances can include well pumps, septic systems, and water softeners. Homeowners can even add coverage for pools and spas, wine coolers, additional refrigerators, or even for roof or pipe leaks.
Homeowners can even get coverage for various parts of the structure of the home. This can be very beneficial for those who are purchasing a newly built home. These options can also be customized to cover the workmanship, foundation, floors, and walls to protect this pricy investment.
What are the Benefits of a Home Warranty?
One of the major benefits a home warranty can provide is easing the burden of a major household repair. When buying a home, it can be impossible to know exactly how old everything in the home is or how well it was taken care of. Although a gas furnace can typically last 16-20 years, it may quit working the first winter in the home. Without a warranty, that would be around $5,000 out of pocket.
The home warranty often provides policyholders with a reduced, flat-rate fee for all their service calls. This can be significant savings for even small repairs. In addition, homeowners may be able to reduce their costs further with upgrades to their contracts to include other appliances or even preexisting conditions.
A home warranty can also be convenient for those new in the area or the elderly homeowner. If a covered item breaks down, the policyholder can simply contact the provider and they will send a technician out. This removes the worry of finding a repair person to handle the job.
What are the Disadvantages of a Home Warranty?
As with everything, there are often disadvantages with home warranties that potential customers should be aware of, such as the type of repairs that may not be included in the warranty. Most home warranties do not cover issues caused by nature. For example, if the furnace no longer works because the house was flooded, the warranty may not cover the repair or replacement cost.
Some homeowners may find they have little choice in the options that the home warranty company chooses. Often, the warranty company will choose particular repair companies that they have a relationship with. They also decide whether the item should be repaired or replaced. Sometimes, choosing to repair something instead of replacing it can just mean more service calls in the future.
There also may be issues of the proper care to an appliance or system. It can be hard to tell if the previous homeowner provided the necessary maintenance for the various appliances and systems in the home. Some warranties require proof of this maintenance. It is important that new homebuyers check with the policy company to ensure their new home’s systems and appliances will be covered even without maintenance proof.
How Can a Home Warranty Benefit Real Estate Agents?
A home warranty is not just for home buyers. Real estate agents can benefit from a home warranty as well. Selling a home can be a long and drawn-out process. Sometimes a home will sell as soon as it’s put on the market. Sometimes, it can take months before a buyer likes the home.
In that time, things can break down. A furnace can quit working during a winter showing or the refrigerator can quit working when the iced tea is to be served for the summer open house. These issues can really deter a potential buyer.
A real estate agent can find reasonable coverage for these potential problems while protecting the seller and buyer from serious issues with these systems. It can also assist in safeguarding a transaction to ensure a sale goes through without adding extra stress.
How can a Home Warranty Benefit Home Builders?
A home warranty can even be a great benefit for those building a home. Building a new home is a lot of work and a lot of time goes into the process. It is important that the home is built properly and sound to ensure it is safe and the home builder gets paid. If something goes wrong, it can be quite costly to repair. Even after the buyer moves in, problems with the build are the responsibility of the builder.
A home warranty can help ease the financial impact of these problems. The warranty can offer coverage for workmanship. This provides protection for defects in the materials and workmanship that went into building the house to ensure it meets clearly defined construction standards.
The warranty can also cover defects in the distribution systems of the home. This includes the electrical, plumbing, and mechanical systems. It can also provide insurance-backed coverage for load-bearing elements and issues caused by soil movement.
What is the Cost of a Home Warranty?
The cost of a home warranty is significantly less than the costs of the various repairs it covers. A basic policy will run about $300-$500 per year. However, this cost is dependent upon the provider, the type of home, and the appliances and systems being covered by the policy.
The cost of coverage can also depend greatly on the additional coverages added to the policy. If there are additions to the policy, the cost of the policy will go up. The best method for determining the price of a home warranty is to get a quote from the company. Many companies can provide free quotes with some basic information about the home and what will be covered.
Buying a home is a major investment and should be protected in the best manner possible to save the homeowner money and ensure they can keep the home running. Homeowner’s insurance is only half the protection needed for a home. A home warranty can help give homeowners the peace of mind in knowing they have complete protection.