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Home Warranty 101: What You Need to Know

You’ve probably heard about home warranties as you’re offered one when inquiring about buying a property. These are either presented by the house seller or other agencies that get news of your purchase. Regardless of whether that home is old or new, here are some clarifications about issues surrounding home warranties and the pros and cons when availing one. 

What Is A Home Warranty? Is It Required?

A home warranty is a contract by a warranty company and the homeowner when a property is purchased. The contract covers replacement, repairs, and maintenance services of installed appliances in a home bought. A home warranty is not a homeowner’s insurance. It doesn’t cover fires, weather and disaster damages, crimes of property, and certain water damage types.

Owning a home warranty isn’t required when owning a home. Although, it is a good investment to save thousands of dollars in the years to come.

Reasons to Get A Home Warranty

1. Saves money on repairs and replacements

Nothing lasts forever in your home no matter how hard you take care of it. When some home components break down, the warranty company sends a technician for repairs or a replacement. The costs for these are either greatly reduced by discounts or are provided for free.

2. Saves time and energy

Even if you’re handy yourself, warranty services provided by the company are swift and effective. That means no more sweating or waiting.

3. Fast application time

Home warranty companies won’t take long when you apply for their services. Some companies provide services immediately after application. Others have a short waiting period of 15 to 30 days.

4. Covers a lot of home appliances

The warranty covers repairs, maintenance, and replacement services for major appliances such as plumbing, electrical, and HVAC systems.


How Much Does It Cost?

Availing a home warranty contract costs $400-$800 mostly. The costs vary by property types such as single-family detached, condo, townhouse, or duplex. Warranty costs don’t necessarily differ by age, but the price can be a little higher if the unit is brand new. Payment options are also available in full, installments, or extended plans.

Are There Drawbacks?

Part of a home warranty problem is that it doesn’t cover items that have been neglected by the previous homeowner. Damages can’t be undone. Home warranties eliminate the freedom of choosing your own service provider. If you don’t like the work done by their contractor, there’s nothing you can do.

Also, the homeowner can’t choose the model or brand of a home component replacement. The warranty contract and the company will only provide an item of similar or equivalent quality.

Is A Home Warranty For A Rental Property Worth It?

For landlords, yes. You can save a lot of money for repairs and maintenance caused by normal wear and tears. The company also connects you with the best and nearest contractors to the property. If you live far away from your rental, this makes your tending to repair and maintenance responsibilities fast, effective, and easy. Regarding appliance fixes, warranty companies ensure that the replacement parts of units are all of high-quality and affordable.

Overall, if you’re a landlord who can’t do maintenance, repairs, and replacements, availing a home warranty for your rental is highly recommended. The home warranty contract also helps you hold problem tenants responsible for the damages and costs of appliance repairs and replacements. This is due to the warranty company personnel’s documentation that can be used in court.

If you’re ready, make Landlord Prep your go-to resource for landlording education. Here, we offer a complete DIY landlording course to get you on the right track. Join our academy today. If you want, you can check out Flavia’s real estate investing webinar first!