In a competitive market, homeowners need to find ways to set their home apart from others. One way to do this is by offering a home warranty. But first, what do home warranty cover? Every company has different plans and coverages so it is important to look into each separately and see what plan works best for you.
The right plan can increase value by giving buyers peace of mind that their systems and appliances will be covered. However, it is important to understand how a home warranty works before you decide on the right one for your needs.
1. Shop Around
Home warranty companies charge annual premiums to cover the cost of repairing and replacing appliances and systems. Some companies offer a “build-your-own” plan that allows buyers to choose basic coverage, plus add-ons like whirlpool bathtubs or ceiling fans.
Premiums, exclusions and caps vary greatly by company, so shoppers should carefully review plans to find the best deal. They also need to consider whether a policy has aggregate limits for all claims or separate limits for each item covered. In addition, a company with great customer service is important. This will make it easier to file a claim if something goes wrong. In some cases, the service call fee may be deducted from the final settlement.
2. Prioritize Repairs
Home warranties are a popular option for homeowners and buyers alike. They provide a financial safety net for unexpected expenses and offer peace of mind for a relatively low price.
Despite the benefits, home warranties have some drawbacks. They often have coverage caps and may only cover parts, not whole appliances or systems. They also typically only cover natural wear and tear, not issues that result from poor maintenance.
For these reasons, it’s important to review your coverage and make the most of your home warranty by researching providers, focusing on critical repairs, documenting everything, working with contractors, exploring add-ons and reviewing your coverage annually.
3. Get Regular Maintenance
Home warranties are service contracts that cover the cost of fixing or replacing appliances and systems in a home. They can be purchased by homeowners or offered to buyers during the purchase process.
A home warranty can be helpful for first-time homebuyers who don’t have an emergency fund or haven’t had a chance to build up savings. It can also be useful for older homes that have outdated or faulty systems and appliances.
However, a home warranty may not be worthwhile for homeowners who don’t take
steps to maintain their appliances and systems properly. Additionally, some home warranty companies place coverage caps on certain items.
4. Schedule Service Calls
A home warranty may seem like an extra grab for a buyer’s hard-earned money at a time when they are juggling mortgage rates and home offers, and closing on one of the largest investments of their lives. But studies show that homes protected by warranties sell faster and for more money.
When choosing a home warranty plan, look for a company that charges reasonable monthly premiums and avoid those with low costs that are masked by service fees or unreasonable coverage limits. Also, consider plans that allow you to add on specific services such as pest control. This can save you money on costly repairs in the future.
5. Ask Questions
When choosing a home warranty plan, it’s important to ask questions. “Make sure you understand what’s covered, how much it costs, monthly fees, coverage limits, and how claims are handled,” says Jordan Woolf of We Buy Houses In Bama. Also, ask about the company’s local contractors. If the company uses subcontractors to perform repairs, find out if they’re licensed and bonded in your state. Ask how the
company vets these local contractors and if you have any legal recourse should they fail to do a good job.
And don’t forget to inquire about whether the home warranty is transferable if you decide to sell your property.
6. Be Patient
It is easy to get frustrated with a home warranty company when it refuses to cover a repair. But it’s important to remember that the company is only doing its job.
In the competitive real estate market, homes protected by a warranty can add value by instilling buyer confidence, differentiating your property from the competition, simplifying negotiations and offering transferable coverage. Several studies show that homes with warranties sell faster and for more money than comparable homes without them.
For first-time home buyers who have depleted their savings, a home warranty can be a lifesaver. But they should know that a warranty does not replace the need to set aside money for future repairs.