Picture this: 

You’ve just closed on your first house, excited to turn it into the home you’ve always dreamed of. You’ve moved in, you’re decorating, or perhaps slowly curating your furniture. Everything is going fine until suddenly, in the midst of July, your A/C stops working. It’s an extremely expensive fix - one that will cost you thousands of dollars. You’ve already spent hundreds of thousands on your home; you don’t want to spend even more! This is where a home warranty comes in. 

• What are they?
• Who pays for them?
• How long do they last?
• Where do you get them?

Home warranties protect home buyers from unexpected problems and repairs that occur after closing. A home warranty is negotiated during the contract. Either the buyer pays for it themselves, or they can request the seller to pay for the first year. Home warranties cover major appliances, systems such as air conditioning and plumbing, and even smaller things like your garage door opener. Home warranties don’t cover pre-existing conditions, however, so issues found during inspection are not covered.

If something comes up after the homeowners have owned their home for a couple of months, they can make a claim on their home warranty. Occasionally there’s a small service charge, usually between $50 and $150. Depending on your warranty, you can either choose your own technician or the home warranty company can offer a list of technicians that you can use. Sometimes, if an appliance can’t be repaired, they will offer credit to get a new appliance.

Depending on what you want covered, home warranties can cost between $500 to $1,000. They’re generally one year long, so if you’re under contract, speak to your realtor about negotiating yourself a home warranty so that you can have some peace of mind. If you end up being one of those unlucky home owners that have 10 issues that pop up in the first year, buying a home warranty will save you a lot of money.

Are you more of a visual learner? Watch our video over the same topic!