Valley Real Estate

jack pearce and al leonard

Buyer Protection - Home Warranty

Home Warranty. An Extra Measure of Protection

Our home. The largest investment that most of us will ever make. The last thing you want as a new home owner are costly repairs of appliances or aging mechanical systems. Homeowners and sellers alike will find a home warranty a very affordable way to preserve peace of mind and to help protect your most valuable asset.

What a Home Warranty IS?

The Home Warranty is normally a one-year limited home service contract that helps protect homeowners against the costs of repair or replacement of covered appliances and major systems that breakdown due to normal wear and tear. As in any contract not everything will covered, so please read all of the fine print. In our experience the home warranty should be made part of your financial planning.

We have seen this very affordable coverage save our clients thousands of dollars in repairs. No, the home warranty will not pay for a new roof, but it will fix any leaks that develop in your present roof. It won't pay for a new air air-conditioner, but it will fix the old one which could easily cost you over a thousand dollars to repair.

There's are lot of home warranty companies to choose from and not all of them are reputable. So be very careful in choosing one. The HomeTeam can recommend several to you that we know from experience who will perform exactly how they say they will. Call us today.

What a Home Warranty IS NOT.

The Home Warranty is not a substitute for Homeowners Insurance. A Homeowners policy is "hazard" insurance ― protection against events such as damaging winds, fire, theft, and even liability for injuries and damage you cause to other people. It will not cover your furnace when it fails to come on next October, but your Home Warranty will. The home warranty protects your homes systems (plumbing, electric, heating and cooling) and major appliances (refrigerator, stove, dishwasher, etc.) when they break or stop working all by themselves.

How Does a Home Warranty Benefit the Seller.

The major benefit is peace of mind. By providing the Buyers with a warranty, your more confident that the buyer won't be knocking on your door after the sale with charges of non-disclosed defects. Considering the expense of defending yourself against such a charge (true or not) the cost of providing a home warranty is minimal.

Secondly, if you purchase a home warranty at the time your home is listed for sale, your home is warranted for you during the listing period until it's transferred to the buyer at closing. Although the seller coverage is not as extensive as the buyer coverage, considering that you will probably be asked to provide a home warranty for the buyer anyway, you might as well take advantage of this added protection. (You don't even have to pay for it until closing).

Thirdly, there is a wealth of evidence that homes with a warranty are more attractive to the buyer, therefore they will sell faster and for more money than homes without a warranty.

How Does a Home Warranty benefit the Buyer.

Again, the major benefit is peace of mind. Only now, it's peace of mind knowing that after you've used all your cash reserves coming up with your down payment, you won't have to shell out another couple of thousand to fix or replace the furnace or hot water tank any time soon. You'll rest easier, knowing that unexpected repair costs are shared by the warranty provider.

For the first time home buyer, who is not yet used to dealing with such problems the warranty can be invaluable, because after you contact the provider with the problem, the provider will handle everything including calling a reputable repairman or service contractor.

How Much Does a Home Warranty Cost?

There are many providers and they all have different coverage, cost and co-pay plans. You should take time to compare companies and plans before you purchase. Typically, however, the cost of the home warranty will run between $350 and $450. For each claim there will be a co-pay (or deductible amount) of $50 to $100. Also, there will be a service fee (usually $35 - $75) for each time a service contractor must make visit your home.

What's Covered?

Basic Coverage For The Seller - typically includes:

Central Heating
Plumbing
Water Heater
Attic/Exhaust Fans
Electrical System
Ductwork

Basic Coverage For The Buyer - typically includes:

Roof Leak
Central Air Conditioning
Septic System
Refrigerator
Dishwasher
Range
Oven
Garbage Disposal
Trash Compactor
Built-in Microwave
Garage Door Opener
Door Bell
Central Vacuum
Lighting Fixtures
Fire/Burglar Alarm System

Optional Coverage For The Buyer - typically includes:

Washer
Dryer
Pool
Spa
Well Water Mechanical

How Does a Home Warranty Work?

You determine that a failure has occurred in a covered system or appliance.
You call your warranty provider. (Note: Your first call is always to the provider. If you call a repairman first you will almost always void the warranty. Call the warranty provider first for instructions.)
The provider will contact an approved service contractor with whom the provider already has a business arrangement.
The service contractor will contact you for an appointment to access the problem.
The service contractor will repair the problem according to the terms of the warranty.
The provider will pay the service contractor for parts and labor and bill you for the deductible portion of your plan as well as the service fee.