Do I need that Home Warranty?

If you’ve purchased any appliances or electronics within the past 10 years you’ve probably been offered an extended warranty – a piece of paper that says if what ever you just bought stops working you simply bring the item back and they repair or replace it.  Realistically you can’t just bring your home back and have it repaired or replaced if something goes wrong after the purchase…but, with a home warranty, you can have a service person come to your home and fix or provide a new covered item if it stops working.

Think of it this way – you’re in your home of 2 weeks, jump out of bed and crank on the shower, and no hot water.  Not only can it ruin your day, but think of the damage it can do to your wallet especially after all the money you just put toward your home.

Since most people can’t predict when an appliance might fail or when a pipe might decide to leak – there are Home Warranties.  These are offered usually by your real estate agent when you are signing your contract (purchase and sales agreement).  They can cover a variety of home repairs, including water heater, plumbing, electrical, furnace/air conditioning, roof, etc.  However, you have to read the plan carefully.  There is usually  a basic plan that covers internal electrical and plumbing, water heater and range but little else.  To have heating and air conditioning covered it is an additional fee and if you are looking to cover exterior plumbing or the roof expect another fee.

So, should you buy a home warranty?  If the home you’re purchasing isn’t new construction – YES!  I strongly suggest you purchase a home warranty.  That doesn’t mean that you should waive your right to inspect the home or ask to have any defects or repairs found in the home inspection corrected.  It is a protection plan for the future, to insure that if the water heater goes out it is replace with little extra cash out put by you.

If the home you’re purchasing is new construction – YES.  Why, many home builders offer their own warranty, covering construction, and appliances in the home.  Home warranties for new homes generally don’t kick in until the builder’s warranty is up (1 to 2 years).  This is the tricky part, you’ve purchased your new home, with all new appliances, do you really need a warranty?  After all, mom and dad’s dishwasher lasted them over twenty years without a problem, and the stove and water heater are both good for 10 to 15 years right?  Maybe, but as the saying goes “life happens” and sometimes silverware gets fed into the disposal or the water heater springs a leak in 3 years or the burner on the stove just stops heating up.

The second concern for a new construction home has a little more to do with the current economy than your dishwasher.  What happens if after you purchase your new home and the builder goes out of business?  Will someone still be there to cover the builder’s warranty, maybe but maybe not.  So the answer is YES, even if the home is new, a home warranty is a wise decision.  Just like the extended warranties at the electronics store – you know the one that replaced the DVD recorder after Junior fixed it with his toy mechanics set.

Remember to read the literature, so you are aware of what is truly covered by the plan you get!

Peace of mind — is always a good investment in my book!

Related posts:

1. You've Decided to Buy a Home
2. Fine Tuning Your Home Search
3. Signing the Contract
4. Time is of the Essence