Buying a house can come with some mystery.
A common question for most people buying a home is "What if something needs repair?" Especially the systems and appliances of the home like the A/C, dishwasher, garbage disposal, kitchen appliances, etc. It can be intimidating to purchase a home with those things and have no idea how long and if they will work correctly!
One step home buyers can take to prevent any costly surprises later, is to invest in a home warranty plan.
You may be thinking, "What is a home warranty? And, why do I need one?"
A home warranty is a contract that you make with a home warranty company to cover certain items if they fail or do not work (usually the coverage begins 30 days after the warranty is purchased or after you move in). When something in your home fails, for example the A/C, you can call your home warranty company and schedule a service call. There is a deductible you will pay and if the parts and service are covered in your contract, the home warranty will pay the rest.
A home warranty is different from homeowners insurance which covers the structure and the belongings in it (Think of flooding, fire, accidents and other things like that-those items are usually covered in some way in a homeowners insurance policy).
Here is how the process works:
Step 1: You notice something in your home is not working and you cannot resolve the issue yourself.
Step 2: You contact your home warranty by phone (most companies also have online requests available). They send your claim to a local service provider.
Step 3: The local service provider contacts you directly to schedule an appointment to take a look and do the repairs.
Step 4: The service provider comes out to diagnose the problem. They will communicate with you about the problem and what needs to be done. Usually they will tell you if something needs repair but is not covered by the home warranty-but always ask to make sure. They will complete the work.
Step 5: The service provider will bill your home warranty and typically you will only pay the deductible. Sometimes, the appliance or system needs replacement. Each contract is different, but you can find out if the home warranty plan you purchased covers full replacement-often times, it does!
This can be a huge cost savers to home owners especially if the system or appliance is not brand new. Even in new homes, people are smart to purchase a home warranty.
At the end of the day, if something goes wrong, you will want to be covered.
Each home warranty company is different in what they cover and how much it costs, so you can do some research to find out which company is best for you.
There are different packages available that cover different things and exclude some items. The package you purchase may exclude certain parts on certain items. For example, you may have a home warranty that covers your pool. But, the home warranty company does not cover underground pool plumbing or the pool sweep. If that is the case and one of those items does not work anymore, your home warranty company will not cover it-even though you have your pool covered in your home warranty.
It is extremely important to read through the contract and covered/not covered items to make sure you know what you are buying. Typically, the home warranty has the option of adding coverage for certain items for a little more money.
Home warranties can range in price anywhere from $400-$1000 depending on what package you choose and what is included. You pay it at the beginning of the coverage period (some companies offer payment plans) and you can renew it each year. Be prepared as sometimes, the price increases a little after the first year. You can keep renewing every year as long as you like.
As a real estate company, Ironwood Properties always recommends a home warranty plan for at least the first year of home ownership. This will give you as the buyer peace of mind and help you prepare if something needs to be fixed. We believe in home warranties so much, that we even provide it to our clients for one year for their purchase!
If you have any questions about other items that may help you as a home buyer, contact us today! We would love to help.
Ironwood Properties
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