There are so many obligations a home buyer has to look into upon engaging in a purchase deal. One of your primary tasks is to ensure you are getting your hands on a sound investment. And just to add another layer of protection to your future investment, getting a home warranty attached to the property would be a wise move. A home warranty is basically a service plan that usually runs for a full year after the purchase. This plan provides funding for repairs of replacements of systems and appliances included home warranty in the property. Its typical coverage is the mechanical and electrical components of a new home such as furnace, AC or other heating and cooling equipment. The damages incurred must be solely due to ordinary wear and tear throughout the years of operating the items. This plan can be purchased before closing escrow but must be paid during this process.
Note that you have options in buying the warranty. You can get it from companies or the owner builder has already bought a policy attached to the property. But according to the Home Building Act 1989, owner builders have the responsibility to purchase home warranty within six years of the completion of the home construction. And if at the point of sale the seller has not disclosed the property is owner built and it still does not have attached guarantee policy, fines up to $22,000 will be his liability. Plus, the purchase contract can be deemed void as well. In addition, you must know about the kinds of warranties such as the new home and existing ones. The former is the common type offered by many builders so as to attract more buyers. This is usually a ten-year coverage of the home structure. In an existing home, both ends of the purchase deal can negotiate upon buying a one-year warranty that is the same as an extended service contract. Either option, home guarantees cost from $350 to $600.
There are many advantages upon purchase of a home warranty. Real estate agents especially encourage buyer clients to get this plan. This is beneficial because once you move into the home, you are saved from facing major expenses for replacing heating and cooling equipment or other damaged components. And the warranty can give you some sort of convenience. Once any of the covered systems or appliances is not working, you have the right to claim assistance from the warranty company. When you call them up, they will send a contractor to do the work. Hence, you are saved from scouring for a professional serviceman.
Just so your decision can be more guided in getting a warranty for your new home, you also have to take note of some down sides. Although the company will send a contractor right away to repair the damages, you will still be charged for the repairs, however, this should only be a minimal amount. Further expenses can also be expected as some warranties cover home items you actually did not anticipate being included. For example, a one-year warranty for an existing home may include repairs for heater problems but it does not actually cover for the damage costs if it has been due to rusting. You have to shoulder the expenses if this is the case then. You would also have to pay the service-call fee of the contractor which can be from $50 to $100.
Thus, you really have to be thorough in assessing the details of the warranty presented to you whether by the seller-builder or a third party company. It would be better if prior to purchasing, you already know about the timeframe, meticulously itemized list of covered areas, dues and claim process of the plan. It is really crucial that you carefully read and understand the contract. Most companies use this clause, “We reserve the right to provide cash in lieu of repair or replacement in the amount of our actual cost (less than retail) to repair or replace such item.” This may not necessarily work for your benefit as some companies discount the repair costs to an extraordinarily low price. You also have to check on the credibility of the warranty company. Check out web forums on home warranties wherein clients have expressed their approval or disappointment regarding the guarantees they have. Do research about the track record of the company. There are many online articles as well that review the service and coverage of some companies.