When purchasing a home, questions will invariably arise on the need for a Home Warranty. What is it? What does it cover? Who pays for it? These are all reasonable questions, and the answers may vary based on the specifics of the home and purchase process.
What is it? A home warranty is a contract covering repairs and replacements on systems and appliances in your home, usually for a period of one year. The homeowner can call the home warranty company if an appliance breaks or stops working within the given coverage period. Depending on the contract coverage, the home warranty company will pay to replace and install the new appliance if the old one cannot be repaired.
What does it cover? A home warranty will typically cover most large items, such as your HVAC (central heating ventilation air condition), hot water heaters, plumbing, and electrical. The warranty may also cover regular appliances such as washers, dryers, refrigerators, and stoves. A warranty can be a source of comfort for a new homeowner to help alleviate some of the risks associated with large appliances in the home.
Who pays for it? Most commonly, a home warranty may be part of closing costs whether paid for by the buyer or by the seller. If the seller includes a home warranty it will be included in the purchase contract. This is common due to the convenience of wrapping the cost into the overall price of the home, stretched over a long period of time.
If a home warranty is not included with the sale of the home – either from the seller or included in the contract of sale – the buyer’s agent may purchase a home warranty to protect their buyer.
