Knowing if you should spend money, sometimes up to six hundred dollars on a home warranty is a consideration buyers and existing homeowners should think about. There are many cases when having a home warranty in place is well worth the money and other times that it may not be worth the cost.
Bank owned homes and short sale homes will generally not pay for the buyer to have a home warranty in place and in these cases it may be prudent to have a home warranty. One thing to keep in mind is that home warranty plans generally do not cover pre-existing conditions so knowing that you have an air conditioning unit that does not work is not a reason to buy the warranty. These houses since they have been owned generally by people that are at danger of losing the home and probably lived in the home for many months knowing they were losing the home tend not to take such good care of the property so problem could arise shortly after you take ownership. In this case, you may want to consider a home warranty and the out of pocket expense might be money well spent.
If the home you are buying is fairly new, say between one and 5 years, then a home warranty could be something you forgo at the moment because most things that go wrong don’t happen in the first few years that a house is built. A home that is six to twelve years old will likely start having things like the water heater go out, garbage disposal needing replacing and air conditioning units needing repair so paying for a warranty can paid off.
A home warranty is somewhat like health insurance because you have the policy in place as a preventive measure to costly repairs. You will have a co-pay or a service call of around fifty five dollars and the remaining repair or replacement should be covered. This can save you thousands of dollars in costs. If you own rentals then this is also a good reason to hold a policy in place.
If you choose to purchase a policy or have the current homeowner purchase a policy be sure you know what you are buying, what is covered and what is not covered prior to paying for the warranty. Most policies are for one year and renewing it will be something you have to decide a year later. For some, it never fails, they have the policy and nothing happens but the moment they decide to let it go then a major repair hits!
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