Tip #23 in our series of 70 ways to save money when buying a house is to buy a home warranty.
Despite the love buyers show for their newfound properties, there could be things beneath the surface not foreseen or witnessed. From a cursory glance, homes may appear spotless with no maintenance required whatsoever, even on resale homes. The word of the seller may cloud enough judgment to avoid covering insurance costs on the home. There have been countless cases where a buyer moved into a home only to find pre-existing wear and tear on the home and leaks a couple of months later. For this reason, a home warranty should be considered.
In essence, a home warranty is a service agreement that protects your home's major operations including its roof, water systems, structure, and appliances. They serve a dual purpose in the real estate game: for sellers to use them as a valuable marketing tool during their selling period and for buyers to rest easy knowing their potential home is secure. These plans can be geared towards any home from the spanking new to the 50 year old duplex. As long as your items are in decent working order and conditions arise after the issuance of the home warranty, you should be covered.
Many buyers make the mistake of interpreting home warranty plans as home insurance policies. They are both totally different things. Home insurance policies are plans providing coverage for burglary, theft, and natural disasters while home warranties cover breakdowns caused by wear and tear in addition to failed circuits, plumbing, or any other home malady. A home warranty is excellent for anyone that wants to gain a higher level of confidence when moving into a resold home. In addition, home warranties are touted by real estate experts as critical to after-sale problem prevention. Although buyers still have the right to file suit on sellers who fail to disclose construction and appliance problems, home warranties can lessen the blow.
Today's home warranty policies usually have a standard 12 month term with the option for more. 6 months or more can be provided in seller coverage as well. In addition, many home warranty companies also offer complimentary inspections to ease the transition into the plan. When it comes to selecting a home warranty, make sure you compare multiple providers. Comparing means finding how which items are included in standard coverage, what items are parts of separate policies, the co-payment, and finding out the reputation/track record of each company. By shopping around, you are virtually ensured that you are getting the best coverage for a fair price.
As buyers, you can have the seller pay for your home warranty along with other concessions. This usually occurs when there has been concessions made by the buyer, such as paying for the house at slightly over market value or surrendering to owner financing. Check to see if you are eligible for a home warranty plan paid for by your seller today for better real estate terms.
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