John Karadsheh
When you purchased your home, there is a good chance you received a one-year home warranty.
Whether it was negotiated for you by your agent, or offered by the seller, home warranties are often included with resale transactions to provide peace of mind to buyers and sellers. However, did you know you can purchase a home warranty at any time?
To be clear, a home warranty is not the same thing as homeowner’s insurance. Homeowner’s insurance covers major damage occurring as the result of fire, storms, property crimes and certain types of water damage. This is not an optional policy, and is required coverage by your mortgage company.
Home warranties, instead, cover specific components of the home, such as electrical systems, heating, cooling and plumbing (i.e. water heater and garbage disposal). Home warranties also may cover swimming pools and major appliances, such as washers, dryers, dishwashers and refrigerators.
How do home warranties work? Homeowners purchase a warranty for an upfront annual fee. Warranties run a few hundred dollars per year, and vary based on the warranty company and on the extent of coverage. When something in the home breaks, the homeowner calls the warranty company who, in turn, schedules an approved service provider to handle the repair. The repair company then determines if the needed repair or replacement is covered by the warranty, and completes the work. For each time the homeowner files a claim, and has a repair company come to the house, the homeowner must pay a service charge, usually $50 or $60.
There are some drawbacks. Home warranties do not insure you never have to spend a penny on home repairs or maintenance. Home warranties typically will not cover items not properly maintained or improperly installed. They might not handle code violations or unusual wear and tear. Additionally, warranty companies do not let you choose your own service provider. They will choose the provider on your behalf.
Not all warranty companies offer the same coverage or service. Like in all industries, some companies are better than others. To find the company right for you, ask around. Check with your REALTOR® or neighbors, or give me a call to see which companies have the best track record. In addition, always read the fine print in the contract to see what is and is not covered.
John Karadsheh is a licensed REALTOR® with Coldwell Banker, Trails and Paths Premier Properties. He also is an Associate Broker, Accredited Buyers Representative, a Certified Residential Specialist and was the No. 1 residential real estate agent in Arizona by Ranking Arizona, the Best of Arizona Business. You can contact John with any of your real estate questions. Call him at (602) 615-0843, or go to his Web site at www.BuyAndSellAZ.com.