What is a home warranty? How does it work?
Posted on Thursday, August 23rd, 2007 at 10:11 am.Home warranties offered by 3rd party providers cover certain items in the home for a period of 1 year after the date of sale.Typical items covered include appliances & HVAC systems. You can also get extended coverage for items like pools & spas and other parts of the house.A policy typically costs around $400 and has a $50 to $100 deductible.Our view on home warranties is mixed. If the seller is paying for one, then definitely get it. But if you're considering buying one on your own, you should Google the provider names below and do some research on them. We've found that they often try to deny claims if there's any question as to whether or not the item qualifies. For example, one client had "pool & spa" coverage but when the inside control panel failed, the warranty company said it wasn't a covered item because it wasn't a "necessary item" to run the pool (i.e., it was a "convenience item").Here are several providers in our area:
- HMS Home Warranty
- 2-10 Home Warranty
- AHS Home Warranty (this is the firm the customer had the pool problem with, so we're not too keen on them)
Note: the warranties discussed in this section are different from builder home warranties, so don't get confused! We are discussing third-party warranties for resale properties.
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January 4th, 2008 at 5:47 pm
Hi Daniel: I think it is extremely important that our buyers get a home warranty when they are buying a resale home. I also think if they ask us who to suggest, that we give them more than one suggestion, just in case something goes wrong, so that our liability is lessened.
January 4th, 2008 at 5:49 pm
Daniel, I recommend home warranties to all my clients and have one myself that I’ve renewed year after year. Several of my clients have had claims taken care of through the warranty company and have been satisfied with the purchase. In today’s market, many times the sellers will pay for the home warranties as part of the contract for sale.
January 4th, 2008 at 5:59 pm
Good morning all. My name is Ken, and I’ve just joined this group. I’m actually starting up a new and relatively unique RE advertising/ marketing company- but that’s a separate topic. I wanted to join this VA group because I know there are still land and lots being sold and developed out there a fair amount- unlike where I am in New England. Anyhow, as far as the 3rd party home warranties, I have many opinions. I’m also a general contractor and I’ve headed our company’s “builder warranty” for a couple years as well. If a seller will buy it (for around $400) as a selling feature/ gimmick, then I’m all for it- of course. Nothing coming out of the realtor’s pocket there. As with all warranty companies in all industries, they’re in business to make money. They need to earn more than they expend in claim work and repairs. Of course they’ll deny questionable claims, and even ones that they will actually fix, sometimes the resident will have to jump through many hoops to get it done. Have you ever read the terms of a home warranty? Like all warranties, there is 1 page of what it includes/ what is covered, and then 5 pages of exclusions. They’re not dumb. That’s my 2 cents on it. Look forward to communicating…. -Ken