In your home search you may see a few listings offering a free home warranty with purchase of the home. What exactly is a home warranty?
Home warranties offer protection for a specific period of time on items like appliances (stove, ceiling fans) and home systems (like AC, plumbing) maintenance and repair. Each warranty varies in the details, so you should understand exactly what it will cover and for how long.
Sellers often offer home warranties to give the buyers a peace of mind that when they purchase the home they won’t have to worry about repairs for the coverage period, which is usually a year of two. This is great for those buyers who may find them self cash strapped after a large down payment and moving cost.
How is it different from homeowners insurance? Homeowners insurance typically covers larger items like structural damage, vandalism and acts of nature and not system maintenance and regular repair cost. Homeowners insurance is required at the time of closing and warranties are optional.
If you buy a home without a warranty, you can purchase one at anytime. It does not have to be from day one. According to homewarrantyreviews.com, the average cost of a home warranty typically range from $250 to $400 a year.
Insider tip: If many of the appliances are new and are still under manufactures warranties, consider if you really need the double coverage.
Home warranties are a fairly inexpensive level of protection and peace of mind for buyers. Especially for those buyers considering short sales or foreclosed homes that don’t come with much documented history of maintenance.
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