home warranty

All Home Warranties Are Not the Same

Whether you’re buying or selling a home, chances are good that a home warranty will be discussed at some point. So, what is it?

In short, a home warranty is a service contract — similar to an insurance policy — that protects the new home owner against the cost of unexpected repairs or replacement on major systems and appliances that may break down due to normal use. Of course, the coverage is only for systems and appliances in good working condition at the start of the warranty period.

All home warranty plans are not the same, so be sure to check to see which items are covered, and whether or not it covers full replacement value. Common items covered include plumbing, electrical, furnace, refrigerator, dishwasher, garbage disposal, stove, microwave, water pump, washer and dryer, heating ducts and water heater. Swimming pool equipment, hot tubs, saunas, and landscaping items are usually available with a surcharge.

A home warranty is not a requirement to sell your home, but is frequently offered by the seller upfront to ease the buyer’s mind both during and after the sale. If the home owner is not offering a home warranty, it is usually negotiated into the offer at some point by either the buyer or seller. A good home warranty plan costs around $400 and normally covers items for one year.