Should I get a home warranty?
I get this question from many Boise home buyers that have decided to purchase a home. What is a home warranty and should I get one?
What is a home warranty?
A home warranty is a plan purchased by the home buyer or seller from a 3rd party company which can cover items including but not limited to;
- Heating
- Attic and Exhaust Fans
- Built-in Microwave
- Kitchen Refrigerator
- Ceiling Fans
- Circulating Pumps
- Dishwasher
- Ductwork
- Electrical System
- Garage Door Openers
- Garbage Disposal
- Instant Hot Water Dispenser
- Over/Range/Cooktop
- Pressure Regulators
- Sump Pumps
- Telephone Wiring
- Toilet Tanks and Bowls
- Trash Compactor
- Plumbing Stoppages
- Plumbing System
- Water Heater
Home Warranties can range in price from $250-$400 for buyers 1 year coverage. The coverage “details” or “fine print” on the warranty booklets are about a mile long and include terms such as “plumbing stoppages not covered – Stoppages caused by roots, collapsed or broken lines outside the main foundation, access to drain or sewer lines from vent, removal of water closets (toilets), and costs to locate, access or install a ground level cleanout.”
Another key thing to remember with a warranty plan is that if you want to have something serviced, you will pay a $60-$100 service call fee when the technician arrives at your home.
What is not typically covered in your home warranty?
- Central Air Conditioner
- Free Standing Ice Maker
- Free Standing Freezer
- Additional Refrigerator
- Pool and/or Spa Equipment
- Clothes Washer/Dryer
- Well Pump
- Septic Tank Pumping
- Central Vacuum System
These items that are typically not covered can be covered from as little as $20 for Central Vaccum to as much as $150 for pool and spa equipment.
As a buyer, should you purchase a home warranty?
Like any insurance or warranty, it only comes in handy if something goes wrong. It would be advantageous to purchase a home warranty if you felt you were going to need it. An older home might need something fixed more often then a newer home, therefore a home warranty would not only provide some peace of mind, it would likely come in handy in a pinch. One of the best warranty plans that you can get is from hiring a quality home inspector to inspect the property and evaluate the expected lifespan of the properties major appliances as well as structural features like roofing, framing and insulation.
If you have little to no money in savings and you are purchasing a 50 year old home in the North end of Boise, it would be a good idea to purchase a home warranty plan. While the plan may run as much as $400, you can actually wrap that cost into your home loan so you don’t have to come out-of-pocket with the money yourself. You can even ask the seller of the North end Boise property to include it in the purchase price of the home.
If having to spend $3,000 to fix your furnace in the middle of winter would cause you to foreclose on your Boise property, maybe you should get a home warranty.
As a seller, should you purchase a home warranty?
What is the benefit of purchasing a home warranty as a seller? One benefit is that purchasing a home warranty as a seller covers the property during the listing period. This could really come in handy should you sell the property and the buyer performs a home inspection. The items that show up on the home inspection may be covered for as little as $60 and during a home inspection, warranty items are likely to be found. Another benefit of purchasing a home warranty as a seller can be for marketing your home. Going back to our older North End Boise property, some buyers might be turned off by the idea of future maintenance on the property. A home warranty might be just what the buyers need in order to take a leap on your particular home. Sure they could purchase a home warranty on their own, but some boise home buyers aren’t aware that you can purchase a home warranty. A home warranty already on your property also gives the buyers a feeling of security that if there is a warranty already on the property, the property should be in pretty good condition. After all, nobody would warranty something that was going to fall apart, right?
The answer of whether you should purchase a home warranty can be answered by only one person, you. I would advise that if your property was in bad shape, maybe some renters damaged the property and you dont quite have the money to fix it up, you could purchase a home warranty. You could even market the home as “sold with home warranty” without even purchasing one until the home sells, which could be purchased through funds from escrow and taken out of your proceeds, so literally no out-of-pocket money until you sell the home.
Can you purchase extended coverage for new construction homes?
Yes – While most new construction homes come with 1 to 2 year warranties on them standard, you can purchase a 2-4 extended warranty above and beyond the included builders warranty. This can run between $400 and $600 depending on the warranty company and again, you could possibly talk the builder into including this into the purchase price of the home.
Boise Condominiums, Townhouses and Mobile Homes
You can purchase warranties for condominiums, townhouses and mobile homes as well. It is typically less expensive to purchase a warranty plan for these.
Why should you consider a home warranty?
To potentially save money of course! Let’s be real here, the warranty companies are obviously making money or they wouldn’t offer a warranty. What kind of money can you plan on spending should you have an issue with your home? Here are some common issues and prices that go along with them for repairs or possible replacement;
- Heating System – $130 to $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
These prices and fees are estimates and based on current retail pricing. For as little as $60, you could save as much as $7,500 should you have a plumbing disaster…A sh*t show if you will…Sorry I couldn’t resist!
To quote an overused term in the news, “We report, you decide!”
Let me know if you have any questions about obtaining a warranty by contacting me today!
Chase Craig
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