Benefits Of Buying A Home With Homeowner Warranty

This BLOG On Benefits Of Buying A Home With Homeowner Warranty Was UPDATED On October 2nd, 2017

What Is A Homeowner Warranty?

Those who are buying a home, especially first time home buyers can no longer contact their landlord when things break down. There are responsibilities that come hand in hand in being a new homeowner.

  • There are many things that can go wrong in a home.
  • Examples of homeowner responsibilities include repairs such as appliance break downs, roof leaks, well and septic break downs among to name a few. 
  • By having a homeowner warranty insurance policy, homeowners can gain a peace of mind in the event things go wrong the first year. 
  • There are major differences between homeowners insurance policy and homeowner warranty.
  • The items that are covered on a homeowner warranty program is not covered by the homeowners insurance policy. 
  • There are various types of home warranty insurance programs.
  • Before home buyers purchase and sign on the dotted line of a home warranty policy, make sure to read and understand the homeowner warranty policy.

New Homeowner Warranty

Home Buyers buying a new home from a home builder, chances are the home will come with a home warranty.

  • New homes can have a full home warranty without a deductible for the first year and a limited home warranty with deductibles up to ten years. 
  • Home warranty for new homes for the first year may cover everything which includes appliances, workmanship, mold,  punch lists, and defective fixtures. 
  • The longer term warranty normally includes roofing, foundation, heating, plumbing, air conditioning, electrical, and other non wear and tear items.

Pre-Owned Homeowner Warranty

Pre-owned home warranty covers regular wear and tear items.

  • Pre-existing conditions that are found in older homes are not covered. 
  • Most home warranty programs cost between $500 and $1,000 per year and most home warranty programs do have deductibles and service call fees that can range from $100 and up.
  • Home warranty policies can be purchased by the home buyer. 
  • Many home sellers offer home warranties as part of their seller’s incentive to new home buyers to make the deal more attractive. 
  • Sometimes realtors purchase home warranty policies to their home buyers as a courtesy for their business or their marketing program. 

Home warranties are available for one year terms and can be renewed each year thereafter.  It is a wise choice to purchase a home warranty at least for the first year for a pre-owned home.

How To File A Claim On Homeowner Warranty

Whatever is on your home warranty agreement, it will be covered.

  • In the event if the heating system breaks down and it is covered under the home warranty policy,  the policy holder needs to contact the management company that overseas the home warranty program. 
  • They will then dispatch a licensed heating contractor who is on their approved vendor list to correct the problem to working order. 
  • The heating contractor will charge the homeowner the deductible.
  • The service fee that is agreed upon the home warranty contract. 
  • These will be set fees and anything above the deductible and standard service fee will be covered under the home warranty contract and agreement. 
  • Homeowners will probably get a home warranty renewal contract every year and there might be a renewal fee, depending on the home warranty company.

Home Buyers who are looking for a reputable home warranty company, asking the real estate agent for referrals is probably the best bet.  Most real estate agents have a team of reputable contractors and vendors who they normally work with and also know the third party vendors and contractors that are not reputable and should stay away from.

Gustan Cho NMLS ID # 873293
The information contained on Gustan Cho Associates website is for informational purposes only and is not an advertisement for products offered by The Gustan Cho Team @ Gustan Cho Associates or its affiliates. The views and opinions expressed herein are those of the author and/or guest writers of Gustan Cho Associates Mortgage & Real Estate Information Resource Center website and do not reflect the policy of Gustan Cho Associates Lenders Network, its officers, subsidiaries, parent, or affiliates.

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