Home Warranties - Are They Worth It?

Home Warranties - Are They Worth It?

When it comes to buying or selling a home, one of the many decisions that you will need to make is whether or not to purchase a home warranty. A home warranty is a type of insurance policy that provides coverage for certain appliances and systems within a home. This blog will explore the benefits and drawbacks of purchasing a home warranty, and help you determine if it is worth the cost.

For Buyers:

As a buyer, purchasing a home warranty can provide peace of mind. It can protect you from unexpected expenses related to the home's major systems, such as the HVAC, plumbing, and electrical systems. Additionally, home warranties can cover certain appliances, such as refrigerators, ovens, and dishwashers. This coverage can be especially beneficial for first-time homebuyers who may not have the experience to identify potential issues with these systems and appliances.

However, it's important to note that home warranties can come with limitations and exclusions. For example, certain pre-existing conditions or issues may not be covered, and there may be a limit to the amount that the warranty will pay out. It's crucial to review the policy and ensure that you understand what is and isn't covered.

For Sellers:

As a seller, purchasing a home warranty can provide a competitive edge when marketing to buyers. It can demonstrate that you are committed to the home's upkeep and are willing to address any issues that may arise. Additionally, a home warranty can help protect you from potential lawsuits related to the sale of the home. When homes change hands the use is changed.  It may be a larger family, more laundry, more wear and tear on different systems, but it seem what can go wrong will go wrong when selling.  A warranty can take care of many of the issues that arise.

However, sellers should also be aware of the costs associated with purchasing a home warranty. Depending on the size of the home and the level of coverage desired, a home warranty can cost several hundred or even thousands of dollars. Additionally, payments are typically made on an annual basis, and there may be a deductible that must be paid before coverage begins.

Real Estate News:

According to a recent study by the National Home Service Contract Association (NHSCA), homes with warranties sell faster and for higher prices than homes without warranties. The study found that homes with warranties sold an average of 11 days faster and for an average of $2,300 more than homes without warranties.

Where to Find:

Home warranties can be purchased through various providers, including real estate companies, insurance companies, and independent home warranty companies. It's important to compare policies and pricing to find the best fit for your needs.

In conclusion, whether or not a home warranty is worth it will depend on your individual circumstances. If you are a buyer who wants peace of mind or a seller who wants to demonstrate commitment to the home, a home warranty may be a wise investment. However, it's crucial to review the policy and ensure that you understand the costs and limitations associated with the coverage.