Back HomeHow to Choose the Right Home Warranty
A home warranty offers reassurance and a measure of protection when buying a home. Before starting your property search in Brazos County, here’s what you need to know about getting a home warranty.
WHAT IS A HOME WARRANTY?
A home warranty is a contract in which a company shoulders the cost of maintaining household appliances and systems for a fee over a set period. This service contract is meant to protect buyers and sellers in the event that home appliances and systems break down from regular wear and tear after the sale. It is available for new construction as well as older homes that contain items and systems for which information is not readily available.
Not to be confused with homeowners insurance, which covers loss and damages caused by fire, extreme weather, and other unexpected events, a standard home warranty usually covers washers, dryers, and other appliances as well as parts and components of plumbing, electrical, heating and air conditioning (HVAC) systems. Buyers can customize a home warranty plan to include a pool, well pump, or stand-alone freezer in addition to basic items and components.
A home warranty company works with approved service providers. If an item or component covered by a home warranty policy breaks down, the homeowner can contact the home warranty company, which will send a service provider to assess the situation. If the service provider concludes that the repair or replacement is indeed covered by an existing policy, they will perform any work needed. The homeowner will only have to pay a minimal service fee in addition to the amount they spent purchasing the home warranty.
Either the buyer or seller can purchase a home warranty, depending on the terms and circumstances of the sale. It can give buyers peace of mind as well as protect sellers from complaints about home defects after closing the transaction. While obtaining a home warranty is not required, it can be a helpful tool for either party, particularly if the home contains high-end appliances and advanced electrical and HVAC systems. If a home warranty plan is not included in the sale, the buyer’s representative may purchase one to protect the buyer.
WHEN SHOULD YOU GET A HOME WARRANTY?
The decision to purchase a home warranty policy typically arises during the sale or purchase of a property. It can be useful for buyers who have limited information on the history, condition, or maintenance of a home’s components, or how well the property was built if it is a new construction home.
It is also advisable to purchase a home warranty in cases where buyers have depleted their savings and emergency fund during the home buying process and want to protect themselves from unexpected repairs and other major expenses after moving in. For sellers, including a home warranty with the sale may attract better offers as well as effectively reduce post-sale stress.
HOW TO CHOOSE A HOME WARRANTY
- Make sure that the home warranty company is licensed. You can check with the state of Texas to verify whether a company is licensed to do business in the area. The Texas Department of Licensing & Regulation has a list of home warranty companies and residential service providers that have been previously licensed to operate in the state.
Aside from making sure that the company is licensed, conduct research on their reputation. Look at their Better Business Bureau (BBB) reviews and accreditation – the company should at least have a B rating. Look for customer reviews on Yelp, Google, or social media to find out what previous clients have to say about their service levels.
- Ensure that the home warranty policy being offered has sufficient coverage. Before purchasing a home warranty policy, it’s important to understand the amount of coverage that you need versus what the policy offers. The majority of complaints against home warranty companies are often the result of misunderstandings of the kind of coverage a policy offers.
It’s also crucial for buyers to know about the improper maintenance clause, which is commonly included in warranties — this can mean that the buyer doesn’t have full protection if the previous homeowner did not properly maintain the home’s components and systems. Moreover, the buyer may have little to no say in the brand or model of a replacement. They may also not get to choose the service provider.
When choosing a home warranty company, make a comprehensive list of appliances and systems that will need to be covered. When consulting with a home warranty company, discuss exclusions and limitations of each plan. Make sure to read the terms and conditions for each plan before making a decision.
- Understand home warranty pricing. Aside from understanding policy coverage and plan exclusions, it’s also important to know how home warranty pricing works. When researching companies online, request a quote and sample contract for each plan that best suits your needs and budget.
When buying a home warranty plan, you may be asked to select a deductible or service fee. In most cases, the lower the deductible, the higher your monthly or annual premium.
A home warranty policy typically costs several hundred dollars each year and can be paid either in full or in installments. You may purchase a basic or extended plan depending on your requirements. The costs may vary depending on the type of property you own, whether it’s a condo, townhome, or single-family home.
Start the property search in Brazos County with Berkshire Hathaway HomeServices (BHHS) Caliber Realty. Call our team at 979.694.8844 or send us an email here.
