What Is A Home Warranty?

What Is A Home Warranty?

You often hear the term “home warranty” when talking about buying a home but what exactly is a home warranty?  Often the term is confused with other warranties and even insurance.  A home warranty is not a builders warranty, that is more related to a structure of the home and provided by the builder on a new home.  Home insurance covers more for incidents such as wind, fire and water damage.  When you think home insurance you can think of more like accidents to the home and contents.

A home warranty on the other hand is more directly related to the day to day appliances and mechanical items of a home.  For example a home warranty typically covers some plumbing, electrical, built in microwave, HVAC, exhaust fan and other similar items you use everyday in your home.  There are extra items you can purchase coverage on that is not typically included in the basic home warranty such as refrigerator coverage, washer & dryer, pool and spa equipment.

So how exactly do you use a home warranty?  When ever you have an issue with the items I mentioned such as the air conditioner you want to make sure you call the home warranty company directly to report the issue.  They will then send out a third party vendor to take care of the issue as long as it is something covered in their warranty.  The cost to you is the service fee, so if the bill comes out to $400 then you only pay the service fee which tend to be in the $60 to $80 range.

Please remember not to call an air conditioner company to fix the issue then expect the home warranty company to pay them.  They have to use their third party vendors they have a relationship with already.  Also keep in mind not all home warranty companies are the same, it is very important to read the fine print.  I find most complaints about a home warranty is due to a misunderstanding of the coverage and this can be avoided by reading the fine print and not making any assumptions of coverage.

With a heart of a teacher I look to educate my clients about the process of buying, selling or renting real estate.  I strongly feel an informed and educated consumer will make better decisions and be less likely to be taken advantage of.

Have questions about this or other topics, don not hesitate to contact me.

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Luis Cuevas, Realtor®

RE/MAX Cross Country

1990 Justin Road

Highland Village, Texas 75077

(214) 783-0535

Luis@MakeNorthTexasHome.com

Check out my website for more helpful tips:

http://MakeNorthTexasHome.com

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Are Home Warranties Worth It?

As multiple offers become more and more common many buyers are trying to make their offers stand out.  One way of doing this is not asking the seller to pay for a home warranty for the buyer.  This may lead the buyer to pay for a home warranty themselves or question not getting one all together, which begs the question… Are Home Warranties Worth It?

Home warranties like any other warranty are designed to take on some of the risk, in this case common home items being covered.  For many years they have been almost standard that a seller pay for one for a year for the buyer at closing.  Now sellers are not having to do this because of the very high competitive atmosphere we are in.

It depends if the warranty would benefit a buyer or give them the piece of mind they would like.  First time home buyers who plan on living at the property may view it as a safety net and would opt to buy one, even if they had to pay for it.

An investor purchasing a rental property may opt to not purchase one, instead self insuring.  Let’s keep in mind an investor would be more likely to have the funds to self insure and take that risk.  The investor would also be more likely to have experience fixing some of the common items covered by a home warranty.

Or you are a past home owner with experience and don’t mind taking the risk.  You might be handy or have contacts who could help you if something needed attention at your new home.  For me personally I don’t have one and that is because I fall in the second category of someone who is willing to take the risk, familiar with fixing some of the covered items and I am an experienced home owner.

Just keep in mind what your comfort level is, as it is not the same for everyone.  Would you sleep better at night knowing you have a policy in place or do you prefer to save the money and take care of any issues yourself.  The answer is different for all of us and evaluating where you stand is my best advise.

With the heart of a teacher my goal is to educate my clients so they can make informed decisions.  Education is empowering, also an informed consumer is less likely to be taken advantage of in the future.

Have questions about this or other topics, don not hesitate to contact me.

Don’t forget to “LIKE” this video and be sure to Subscribe to my YouTube Channel as well.

Luis Cuevas, Realtor®

RE/MAX Cross Country

1990 Justin Road

Highland Village, Texas 75077

(214) 783-0535

Luis@MakeNorthTexasHome.com

Check out my website for more helpful tips:

http://MakeNorthTexasHome.com

Subscribe to my YouTube Channel:

http://Youtube.com/MakeNorthTexasHome

Follow me on Facebook:

http://Facebook.com/MakeNorthTexasHome