What Is A Home Warranty- And Do You Need One?

Appliances that are covered by a home warranty

Whenever you are buying a home, one of the biggest concerns will be future maintenance. How old is the roof? How are the bones of the homes? Are the windows in need of replacement? Is there water getting in the crawlspace?

For most buyers, a home inspection is a fair price to pay to determine the condition of the home. If the condition of the home is good, that’s a good indication that there won’t be many maintenance concerns in the future. Even with a home inspection, however, things can still go wrong- and nobody wants to be stuck with costly repairs shortly after paying thousands of dollars to close on a home. Appliances are the most likely to have issues after you move into a home, as the inspectors can’t check their condition as well as they can check a roof or a foundation.

That is where a Home Warranty will come in handy.

While the home inspection will help you determine the current condition of the roof, structure, and defects with the home, a home warranty will cover the service, repairs, and replacement of the costly systems and appliances inside a home.

What Does a Home Warranty Cover?

Typically, a home warranty plan will cover appliances such as your dishwasher, oven/range, garbage disposal, water heater, HVAC, interior plumbing, and electrical systems.

There are also optional items that can be covered. Some systems that usually have optional coverage include the washer/dryer, ductwork, microwave, pool equipment, and refrigerator.

A home warranty is not the same as home insurance, and it does not cover the “bones” of the house- roof, foundation, windows, floors, etc.

Some items might have pre-existing issues that cause them to not be coverable, such as an appliance already malfunctioning prior to obtaining the warranty.

Be sure to check the fine print when determining what the warranty will cover. Many companies will exclude ice makers from the fridge since they are so problematic. Another common term included in the fine print is that there will be a 30 day waiting period before you are able to file a claim. This way, if there are some repairs you want addressed as soon as the warranty is purchased, you may need to wait a period of time before they will repair it.

How Much Is A Home Warranty in North Carolina?

Typically, a North Carolina home warranty will cost around $50 a month, or somewhere around $500-900/year. Service fees can cost around $50-125 for repairs. These can vary depending on location, the coverage plan chosen, and additional coverages.

When Can I Get A Home Warranty?

Most home warranties are purchased by new homeowners when the house is sold, but they can be purchased by existing home owners as well. Even if you have lived in your home for 10+ years, you can still purchase a home warranty plan.

Sometimes sellers will offer a home warranty to the buyer of the house so that they can have peace of mind regarding their purchase decision.

Should You Get A Home Warranty?

When determining if a home warranty is the right option for you, you should consider the condition of the home and age of the systems and appliances that are covered. If the appliances are older and maybe showing signs of wear, a warranty might be a good idea. Keep in mind that a home warranty will not cover dings in the sides or pre-existing issues.

It’s a good idea to make a list of all appliances that would be covered, and determine how much it would cost to repair or replace them. Some companies work with contractors that will be at the scene of the issue the day the company sends them out. This can be a huge advantage, for example, in July, where it might be weeks before a HVAC specialist can fit you into their schedule. So consider the time it would take without the warranty compared to the time it would take with your potential home warranty company.

Another option, if you are one of the many homebuyers trying to decide if you should purchase one for your new home, is to negotiate a warranty from the seller. There is an option in the standard Offer to Purchase form that you can select to have the seller obtain a warranty for you, if they accept. If not initially upon going under contract, you can also negotiate for a warranty during the due diligence period, after you have any inspection reports back.

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