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Old 11-14-2010, 10:13 PM
 
Location: San Antonio
3,088 posts, read 8,885,017 times
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Do you guys recommend purchasing a home warranty when buying an existing home? Or is it a waste/gimmick?
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Old 11-15-2010, 06:34 AM
 
Location: Lakewood Ranch, FL
5,053 posts, read 7,390,937 times
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Before I got into real estate, I had an agent who provided a warranty as part of her marketing plan. To be honest, I didn't think it was worth anything but literally the day we moved out, the hot water heater broke. It would've cost me a lot more than the service call to replace. If it covers all the things it can cover, I think it can be worthwhile.
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Old 11-15-2010, 02:35 PM
 
1,174 posts, read 6,076,431 times
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I used to question the need for them, but now I've changed my mind. I think that they can be useful.

I've usually negotiated them into the price of house I'm buying. I guess I was really paying for them, but it's difficult to figure if I really could have bought the house cheaper without it.

In my most recent experience, I bought a used house. The seller was out of their mind on the price, but I was hamstrung by my wife. She really wanted it so we kept on dealing with them.

We eventually came to an agreement, but during the negotiations it became apparent to me that the seller was a liar. I caught her in bold-faced lies on the disclosure form and caught her lieing about other things when she was justifying her position.

Her lack of integrity led me to believe that I needed to protect myself. Although an inspection could or may reveal some things she may have concealed, it most likely wouldn't reveal all defects. I decided to buy a home warranty to provide the protection from the seller's lack of integrity.

My opinion turned out to be right. Within the first week, things began to break and components turned out to be defective. They were not easily visible during the inspection, or they didn't act up while they were being tested, but the defects became apparent upon extended use.

The cost of the home warranty turned out to be worth it. I've since had repairs done that would have cost me far more than the cost of the warranty. The repairs have been to the plumbing system, spetic system and most recently the HVAC system.

Is the cost of a warranty always worth it? Of course not. On most properties I've bought before this one, I've never had to use it. However, in this case it has turned out to be a valuable decision.

In all cases it's a gamble. That's the point of any insurance. The company is gambling that you won't need to use it. You're gambling that you will need to use it. It's always skewed towards the insurance company's benefit, but there's a chance of them breaking their winning streak the longer they play the game with you. That's what happened with our most recently purchased property.
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Old 11-17-2010, 10:33 AM
 
145 posts, read 543,796 times
Reputation: 139
They're very useful. I've bought & sold two homes, and had home warranties for each. I've always used them, and they paid for themselves with the money they saved me.

It's customary for the seller to pay for them, especially in this market. If you haven't yet made your offer, be sure to request that from the seller.
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Old 11-23-2010, 06:53 AM
 
78 posts, read 232,459 times
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YES. Best $400 I ever spent. You want to be covered for those big ticket items that could break the bank account. Such as, hot water heater, furnace, ac unit and many household appliances. If you're the buyer, have your agent work the home warranty into the deal so that the seller pays for it. In this market a seller would be crazy not to pay such a minimal fee to sell. At the very least they can meet you half way and pay half the cost. Although, they should be more than willing to foot the cost. I'd never let a ready and willing buyer walk away from a deal over $400. But that's just me....

~Dee
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Old 11-27-2010, 09:44 PM
Itz
 
714 posts, read 1,823,587 times
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YES! I bought my pre-existing with a home warranty and have kept it up for years... BEST money I've ever spent.. had my furnace break and all it cost me was a service charge ($55)... I've had them come out and check on it a few times due to my paranoia - yes.. totally worth it..

Covers the big ticket items, pipes, electrical wireing, duct work, etc...
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Old 11-28-2010, 08:49 AM
 
Location: Fayetteville, NC
1,490 posts, read 4,947,394 times
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Saved me a bunch of money with a broken heat pump a few months after buying our first house.

Now that I am in Real Estate I do recommend them to our clients.

I have policies on my current house and rental house.
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Old 11-28-2010, 12:39 PM
 
Location: Athens
470 posts, read 1,247,438 times
Reputation: 259
A home warranty policy is just like any insurance policy, great to have when you need it. I recommend it to my buyers and especially my sellers. Yes, you can get a homeowners warranty as a seller from many companies. I know that the last time I sold without one both my over the stove microwave and my furnace crapped out.
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Old 11-29-2010, 12:14 AM
 
Location: Columbia, SC
8,757 posts, read 17,094,594 times
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I always recommend it for all the reasons posted above.
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Old 11-29-2010, 07:40 PM
 
92 posts, read 185,656 times
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ITA with above posters - yes - especially if the house is not so new and still has original parts. We were supplied with a home warranty when we bought our current house in 10/07. The house was built in 1991 and had not had any replacements/updates (should have been a warning!). The first year we owned it, we used the warranty three times for the furnace stopping (in winter...in Wisconsin - brrr), and once when the garbage disposal died. I renewed it twice, and it covered a new hot water heater last year. Since then, we have replaced pretty much everything covered, so I've let it lapse. However, if we end up selling this place, I'll purchase one for the buyers. So worth it for the peace of mind, IMO.
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