Buying a home is often the most expensive decision consumers make, and many buyers feel more comfortable with their purchase when it’s paired with a home warranty. Here are a few questions your clients should answer before settling on a home warranty.
Who Is Paying For It?
Sellers are sometimes willing to cover the cost of a home warranty for the first year of the buyers’ homeownership. Make sure your clients understand how this would work in their specific transaction.
How Much Will it Cost?
If your buyers decide to foot the bill for a home warranty, suggest they shop around before making a final decision. They may find a more affordable plan or flexible options for adding or removing coverage.
What Does it Cover?
Like other types of warranties, a home warranty isn’t intended to cover every aspect of a property. Your clients should carefully review the conditions of the warranty before obtaining one. These conditions may exclude certain appliances, restrict coverage, or make the homeowners prove they followed manufacturers’ maintenance plans. It’s also possible that other types of coverage, like manufacturers’ warranties for specific appliances, are better options in the long run.
Who Chooses the Repair Company?
Many home warranty companies have repair companies they work with, so the homeowners may not have a choice in who makes repairs or replacements. Your clients should find out whether they have options and decide how much it matters to them who picks the repair company.
I always advice sellers and buyers to get a home warranty. I just bought another house this year. Seller paid for home warranty. We tried to use it 2 times and there was always some reason they would not cover the repair. One we needed a plumber on the weekend it was an emergency. The warranty people said they don’t work weekends and we have to schedule in advance. Ok, next time I have an emergency I will schedule it in advance……. The next time we tried to use it, the price was higher than an A?C guy we already… Read more »
I used to always recommend a Home Warranty for the first year, but after dealing with the Home Warranty companies, I only mention them to CYA, but tell them the many, many experiences I have had with home warranty companies. Just sold a house that the owner had kept the home warranty on it since she bought it 12 years ago – she could have bought several microwaves, a water heater and most of the other things they repaired and still had money left over. The inspector found that the dishwasher was not working. Since the Seller had passed away,… Read more »
Pretty useless article. The real questions that should be asked are as follows: 1) How many complaints does XYZ Company have with the BBB and TREC? 2) How much “Data Collection and Fullfillment” money, a/k/a how much Realtor kickbacks does XYZ Company pay, and is that the reason they are being recommended? 3) What percentage of XYZ Company’s claims are denied? 4) Does XYZ Company use local contractors for repairs, or do they have a staff of repair people that they have better control over? 5) What percentage of XYZ Company’s customers renew their plan after a year or two?… Read more »
We’ve tried desperately to get American Home Shield to pay for problems that are covered in their contract. I say home warranties are a big joke. Don’t waste your money.
I had american homeshield and an antique a/c. I called then 3 or four times a year and every time I called my policy would increase. My a/c looked like a child with a box of bandaids. I finally bought a window unit and ditched has. They are the worst. Every repairman suggested a new unit but they were denied. Now, I keep a few thousand in the bank in case I need another unit. Yes, I sold that house and have a new one now.
I have 3 properties I cover with home warranties. I think I come out ahead. I have received money or repairs for driers, washers, garage door openers. I used them for plumbing issues like stoppages, toilet, hot water heater and furnace. I recently submitted a claim for my hot water heater. It was repaired in less than 24 hours, although this is not always the case. Repairs are usually completed within a reasonable time frame. Home warranties don’t cover everything. It is important to read the contract to determine the best coverage for you.
What company are you using? Your experience sounds unique compared to other comments and my opinion of home warranties. If there is a good company, I would like to know about it.
Sadly, we don’t live in a community where enough repair people are willing to do the work for American Home Shield. I spent 2 weeks trying to get them to find a repair person for our swimming pool pump. In the end, I had to find my own and now, nearly a month later, AHS has not reimbursed me for the amount they supposedly approved. That sounds like fraud to me.
I do find Warranty companies to be “not easy to deal with.” However, they do come in handy. Had a Seller take the Seller coverage and he had to replace an a/c condenser before closing- this saved him LOTS of money. As Realtors I suggest you get to know your REP from the different companies and enlist their help when claims arise. It has saved me time and energy. Also I recommend if the home has an aged central air unit due to the changed laws on these an limited parts for repairs. Haven’t yet had a situation where one… Read more »
I highly recommend Super. No inspection report to review and no waiting period when buying it for a home purchase. They allow up to 30 days after the home purchase to add additional coverage e.g. pool. My buyers added pool coverage after the sale and saved thousands for a failed pool pump and heater.
Is there a Texas law in which a consumer has a right not to chose the Repair company the home warranty is assigning them if they want to use another company?
Awesome post! Thanks for sharing the knowledge and keep up the good work.
Thanks for sharing this.
Most of us got these home warranty policies when we bought the house. It may surprise you that American Home Shield includes a “Class Action Suit Waiver” and I suspect that is NEVER mentioned at closing when you find out the seller has provided this policy. TRA likely benefits from these policies (I may be wrong there, hope I am). Not having the ability to join a class action suit gives too much power and discretion to these companies. Let’s call our legislators and get that changed.