What is a Home Warranty…and do you need one?

What is a Home Warranty…and do you need one?

August 16, 2017

A couple recently purchased a home that included accepting “As Is” condition, as the Fix n’ Flipper was unwilling to offer any further repairs.  They choose to accept that condition to the sale because this seller had purchased, for their benefit, a one year Home Warranty.  This policy made the home an attractive option for these buyers, which proved a very wise choice, as the heating system failed right at the start of a cold snap.  One phone call brought them help and for the price of a service call, a brand new unit was installed on their behalf by the Warranty company.

If you have been spending a lot of time online searching out data that will help you begin the serious business of searching for a home to call your own, you may have come across homes for sale where the seller offers to provide a Home Warranty with the purchase of that house.

Several questions may spring to mind:

  • How is a Home Warranty different from my Home Owners insurance?
  • What does a Home Warranty cover?
  • Who should buy a Home Warranty, the buyer or the seller?
  • If we’ve had a home inspection done do we really need a Home Warranty?

A Home Warranty is not the same as the Home Owners Insurance policy.  The Home Warranty covers fixtures and systems in the home.  Things your home owners insurance doesn’t usually cover such as appliances, AC units, heating system, electrical system and in some instances even the roof and gutters.

Even if the seller of a home you are interested in isn’t currently offering a policy, you could request one as part of your purchase and sale agreement, or choose to purchase one yourself.  The home inspection can certainly reveal any immediate repairs needed and point out deferred maintenance items, but they can’t predict how long a fixture will continue to function in good working order.  Even with the inspection complete satisfactorily, a Home Warranty may be a good choice for you.

The coverages vary as much as the companies who offer them.  Prices are based on the level of coverage you choose.  Your local real estate marketing specialist is a good starting point to gain inside knowledge of what could be most useful in your local marketplace.


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