Extended Warranties Gaining Momentum
As home prices are rebounding, more people are investing in the extended warranty when they purchase. Did you know this is negotiable? Some buyers can have the seller purchase this for them.
Most people purchase a regular home warranty when they purchase a home. So why would they need an extended one?
What Is A Home Warranty?
A home warranty is a protection plan against something going wrong. You can purchase an appliance warranty or a whole house warranty. A typical home warranty is a one year contract that protects the buyer from the cost of unexpected repairs or replacement of major systems or appliances that break down due to normal usage or defects. You can purchase a home warranty at any time.
A major system could include heating and cooling, electrical, and some plumbing. Read the policy carefully. Often the plumbing includes things like hot water heaters, sinks, etc, but not the pipes.
And often home warranties cover structural issues such as the integrity of walls and roofs.
What Is An Extended Warranty?
Extended warranties are purchased on new appliances at the time of sale. Extended home warranties are offered by the warranty company, and will continue the coverage you have for the original home warranty.
Some people feel they get better service when they’re under contract. Others feel that it saves money in the long run. While others feel that it’s not worth it because they look for loopholes.
In the end, it’s a personal choice that you need to evaluate based upon the age of the home and your financial situation.
Why Buy A Warranty?
A home warranty can provide stress-free repair when something goes wrong. Also if you have minimal cash on hand, they can provide a buffer. So if the refrigerator breaks 90 days after close, and you’re still recovering from putting all the cash down on the home, you can get the refrigerator repaired or replaced with a minimal co-payment quickly.
If you’re a seller wondering why you should pay, homes with warranties sell for an average of 3% more than homes where it’s not offered.
The bottom line is to read your policy carefully to find out what is covered and what is not. Also, when offered a home warranty, do your research for reviews and with the Better Business Bureau to ensure you’re working with a reputable company.