CVN & Associates Inc, Florida

Home Warranties 101

The views in this article are my opinion based on my experiences with my own home and the information from our clients and other real estate professionals. This article isn't intended to be Legal advice nor should it be taken that way.

If you just want to hear my two cents, keep on reading. And if you're considering a Home Warranty....READ THE FINE PRINT! TWICE!

What Is A Home Warranty?

How Can We Obtain One?

Do We Need One?

What Should We Watch Out For?

Builders Warranty!

Bottom Line!

What is a Home Warranty? There are several types of Home Warranties. There's the new home builders warranties that you get with a newly constructed home and there's the type of home warranties you buy for previously owned homes. Of course, if you happen to purchase a previously owned home that is less than a year old it may still be covered under the builders warranty. Be sure to ask your Realtor, or the home sellers, for the builders information and contact that builder directly to ensure it will still be covered if you purchase it.

How do We Obtain one? That's the easy question. Contact your Real Estate Agent. If you're buying a previously owned home, you may be able to get the Seller to include this type of warranty at closing. Maybe you can even get the Realtor to throw it in as part of the negotiations. Prices usually range from around $250 to $500 per annual contract.

Do We need one? Is this too good to be true? Can you really buy a $150,000, 15 year old home and have everything warranted for a few hundred dollars? Well....maybe! Did you read the fine print like We told you? The thing about most home warranties is that they are in the business to make money and do not easily repair each and every item that fails. If at all possible, even when it's not possible, they will fix something before they ever consider replacing it. Whoops...don't forget that mandatory service charge! They will charge you a "nominal" fee for each and every "trade" call that you report. A trade call meaning a plumbing repair is charged separate from an electrical call and an A/C or Furnace is charged separately, etc.

Problems for some consumers usually arise when they have a claim. They may have paid up their warranty each and every year and believed everything in their home was covered. Then on the hottest day of the summer the A/C goes out so they call the Home Warranty company who sends their contracted technician to look at the A/C. Remember...these are NOT unconditional repairs. If the technician finds something like a compressor that has gone bad, it's usually cheaper to replace the entire unit than just the compressor in most older units. But, if you have not maintained your A/C equipment as outlined in your contract. Your claim MAY be denied or they MAY tell you it was a "pre-existing" condition that is not covered by your warranty. Most companies will fix, and fix, and fix, before they ever consider replacing something.

What Should We Watch Out For? What are my options if my warranty company denies my claim? We've seen claims denied for very questionable reasons. In my opinion, if a company is going to sell you a Home Warranty contract that says they are going to cover components and systems in your home, then they should cover it. End of story. If they fail to send out the appropriate people to check and make sure all the systems are installed and functioning properly, that should be their problem and you shouldn't have to pay for their lack of due diligence. However the consumer is sometimes left holding the bag even after faithfully paying their home warranty fees year after year.

Every company is different as to what they will or will not cover, so be very thorough in your research and by all means, read the fine print, twice!

Builders Warranty. When purchasing a new home you will usually receive a 12 month warranty. Sometimes builders are not too "motivated" to making these repairs as they should. If you have provided them with a list of items that need repair and they keep stonewalling you then maybe it's time for you to file a complaint. You may also wish to consult with a private attorney for advice.

If you are close to the end of your 1 year timeframe and you have never had your home inspected you may also consider having it inspected so that you know exactly what to provide to the builder as to what needs to be repaired. At the end of the inspection We will provide you with a list of items that you can then present to the builder for repair and if they have any questions they may also contact me so that We can assist you in obtaining the proper repairs.

Bottom Line: If We were buying a previously owned home today, We'd thoroughly inspect it by using an experienced and licensed Professional Home Inspector. We'd try to get the sellers or the Realtor to include a Home Warranty for the first year. After a year living in your home you will get a feel for it's true condition and can make an educated decision as to whether or not to extend your warranty. In my opinion, We'd put that money in the bank and hire my own repair people to handle the problems as they occurred. But, that's just me.

When Buying Your Next Home, Don't Be Surprised......BE SURE!