Home Warranty Coverage – What does it do for me?
Who needs a home warranty? How much does a home warranty cost?
Which is the best company?
Home buyers and sellers are most commonly faced with the home warranty and its intricacies. In most contracts that The Nelson Project sees in Austin, the seller provides a credit to the buyer via the contract for a home warranty purchase at closing. This is a smart idea for Mr. Seller as the warranty can combat any problems the buyer has with the home’s appliances and major systems post closing. It lasts an entire year…just enough time for the buyers to lose the seller’s contact information! Ha! Of course, home maintenance transfers to the buyer once he/she owns the home. The provision of this home warranty is a perk, and one that has become considered common practice in our real estate market.
Our clients most often choose Home Warranty of America (HWA / www.hwahomewarranty.com ) for their policy, and we highly recommend this company. HWA offers coverage for 13 months vs the industry standard of 12 months, and they have very comprehensive coverage. There is a lower cost option covering the basics, and two upgrade options which are sometimes smart, depending on the home. This dandy little warranty covers the home’s appliances including washer, dryer, and refrigerator with the upgraded policy. Wiring, plumbing, HVAC, hot water heater, built-in microwave, range, dishwasher and more are included in the basic policy.
Who needs the upgraded home warranty?
We suggest the upgrade to cover the washer, dryer and refrigerator if the appliances are not new. If the home has brand new appliances with manufacturer warranties covering them, the additional coverage isn’t as necessary. With any home 5+ years in age, there is a certain comfort level knowing you’ve got coverage in case something goes wrong-especially right after move in. It’s nice to know that even if it is just for that first year, you’ve got some cost control covering what might go wrong with a random appliance in your first year of ownership. Also, owners with spa’s or pool’s may want to have that upgrade added to their policy. The policy is also renewable annually, and extra coverage can be added at that time.
How does a Home Warranty work?
With HWA, the home owner simply places a call to HWA to let them know what problem they are having. HWA sends out the appropriate service technician and there is a $75 service charge for this visit. The technician either repairs the problem or replaces the system at no additional cost to the owner. That said, HWA is not going to replace an old water heater with a tankless hot water heater, but they will replace the current system with what is current today.
One of HWA’s upgrade options includes upgraded/energy efficient series appliance replacement, if that is of interest. We’ve known clients who had AC condensers replaced, hot water heaters replaced, and more. HWA’s service fee is $15 higher than competitors (on upgrade policies only), but they also get technicians out to the property faster, and overall there is less hassle with their process.
There are a few key points to know when calling in an item for warranty coverage.
- Make sure you call your home warranty provider first, and only. Having another tech in to look at the problem, or attempt to remedy it could cause more damage. That could lead to HWA dismissing the claim due to a pre-existing condition. It’s best to call HWA first.
- Make sure you call in a problem when it first occurs. Putting a problem off can cause more damage, and that could lead to a pre-existing condition that would negate coverage. Be sure HWA knows your problem just began when you call it in to them.
Bear in mind that the warranty company will likely repair your system for as long as it is cost effective. Also, when replacing an AC condenser outside, that doesn’t mean you would automatically have your inside furnace replaced, or that the portion of your AC existing inside would be upgraded. However, you can always add to what your warranty company is providing for even more energy efficiency.
Who can buy a Home Warranty?
Most often warranties are purchased upon the sale of a property. If a property has closed in the last 30 days, the owner can purchase a warranty from warranty companies with a ‘real estate’ plan. There is a small savings if the policy is purchased at this time. If you are a home owner purchasing the policy outside of a closing, you’d probably be purchasing through the ‘direct to consumer’ avenue, and it is a little more costly. Basic coverage starts at $350 with the real esate plan, and upgraded packaged coverage goes as high as $475 with the real estate plan. Additional items such as pools, spas, termite coverage, foundation coverage are considered al le cart and the total warranty price would depend on coverage added.
© Julie Nelson and The Nelson Project at Keller Williams Reatly, 2008-2010. Unauthorized use and/or duplication of this material without express and written permission from this blog’s author and/or owner is strictly prohibited. Excerpts and links may be used, provided that full and clear credit is given to Julie Nelson and The Nelson Project at Keller Williams Realty with appropriate and specific direction to the original content.