Purchasing
or selling a home is one of the largest, most important financial decisions in
your lifetime and nothing should be left to chance. Having a home warranty can
help both the buyer and seller in the process of purchasing of a home. Most home
warranties cover the seller, providing them a competitive advantage, until the
transfer of the property to the buyer. This helps if there are any issues after
inspection before possession and then for any future issues within the warranty
plan term the buyer might come across. Home warranties are extremely convenient
when a home system or appliance stops working. You call the home warranty
company (available 24/7), they send out a representative at a mutually
convenient time and you pay the technician the trade call fee set up with the
original plan on all covered items. If the items are not covered you pay either
the trade service call or the actual cost of the service, whichever is less.
They fix the items and those items then have a 30 day guarantee. There are lots
of limitations depending on the plans you choose, you will want to read the
specific warranty inclusions and exclusions before deciding on your plan. Home
warranties take the guess work out of finding reputable contractors you can
trust. Warranties are typically purchased for a one year period and can be
renewed annually by the new owner. Typical items covered: Air conditioning &
heat pump, heating system and duct work, plumbing systems, plumbing pipe leaks,
toilet assembly parts, drain line stoppages including roots, water heaters,
garage door openers, range/oven/cook top, garbage disposal, refrigerator, trash
compactor, built in microwave, dishwasher, electrical wiring, electrical
switches and receptacles, fir and burglar alarms, central vacuum, doorbell,
attic ceiling fans, roof leaks, washer/dryer and many more depending on your
plan and the warranty company.
Below
are estimates of retail costs on typical items that have issues (what people pay
that don’t have home warranties):
Heating
system: $130-$3,500
Water
Heater: $115-$1,500
Dishwasher-
$98-$1,250
Air
Conditioning- $130-$4,000
Oven/Range-
$110-$2,700
Kitchen
Refrigerator- $110-$3,800
Plumbing-
$95-$7,500
Electrical
System- $85-$2,500
*Amounts
shown on First American warranty brochure
Typical
Home Warranty companies/fees:
AB
May- $389 Seller/Buyer coverage *$60 per Buyer Trade Call $95 per Sellers Trade
Call Fee
Old
Republic- $375 Seller/Buyer coverage *$75 per Trade Call Fee
$410 Seller/Buyer coverage *$60 per Trade Call Fee
There are Ultimate and Platinum upgrades available as well
First
American- $415 Seller/Buyer coverage *$60 per Trade Call Fee/Covers Seller for
only 180 days
First Class upgrades additional $99
2-10
Home Buyers Warranty- $345
Seller/Buyer coverage *$100 per Trade Call Fee
*Fees
are as of 2012/2013 company brochures- subject to change when companies change
fees
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