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Buy a House - Home Warranty - Ayre/Rhinehart REALTORS®

February 10th is National Home Warranty Day, and it's the perfect day to sit down and determine if the home you want to purchase requires a warranty. When our clients buy a home, our REALTORS® recommend carefully considering the options (and possible consequences) when making this critical decision.

Purchase a Warranty for Peace of Mind

Your home is one of the most significant investments you'll ever make. You'll invest time, money, and resources in the property as the years go by. Purchasing a warranty can give you peace of mind that if something goes wrong, all of the time and money you invest in the property won't go down the drain. At a typical cost of a few hundred dollars per year for a single-family home, a home warranty is a relatively inexpensive line-item in your budget.

A home warranty helps protect you against unanticipated repairs. When you know how much the deductible and cost of repairs are, you can plan for these expenses by setting those funds aside in an account earmarked for this purpose. 


Choose Your Warranty Carefully

Not all warranties are created equal. Some will protect this, while others will protect that. It is imperative that you thoroughly review all exclusions, exceptions, and conditions within the home warranty.

You will want to make sure that the warranty protects against the types of damage that may occur to your home. Most, but not all, will provide coverage for furnaces, air conditioners, plumbing/electrical systems, and appliances. Some provide coverage for hot tubs, swimming pools, ceiling fans, and fixed kitchen appliances. You will want to read the fine print to verify that the specific items in your home are listed under the covered property.  

Remember, a home warranty isn't insurance. Instead, it is an agreement between you and the warranty provider that qualifies you to receive discounted repairs and replacements. When the furnace goes cold, or the plumbing starts to leak, warranty holders receive discounts on repair/replacement services from a list of service providers within the warranty provider's network. This limits your ability to choose contractors and the replacements you want.    

With any home warranty, you have to read the maintenance exclusion clause carefully. Many home warranty providers insert language into the contract that absolves them of liability when you fail to maintain covered appliances and other items properly. Further, home warranties are not homeowners' insurance policies and won't protect property if a fire, tornado, flood, or other natural disaster strikes the home.  

Alternative to a Warranty

When you boil it down to brass tacks, a home warranty may not be the right option for the Midland home for sale you want to purchase. When a warranty doesn't make sense, it may be a better plan to set up a separate savings account to cover any damage or required repairs that could appear down the road.

As a general rule, you should plan to save about 1% of the home's total value each year for routine maintenance and repairs. If the is valued at $300,000, then setting aside $3,000 a year should provide sufficient protection. However, if you purchase an older home with older fixtures and appliances, you may want to increase the amount you save each month. 

Contact Ayre/Rhinehart REALTORS® for more information about home warranties. Our team is happy to answer your questions and help you determine if a home warranty is something you should factor into your budget. 

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