Home warranty companies an (Austin: sale, insurance, broker)

[Localny]

Hi folks..

Wondered if I could solicit some opinions..

Buying a home out in lakeway area, and thinking about a home warrantee service. Our Broker is for some reason pushing hard on us to get them.

It make sense as I am not terribly handy, and the AC unit in our new place is a little old. But I also hear the people who work for these services aren't the best. And they charge all kinds of fees on top of the annual fee when they come out. Wondering if this is the case, and if there's any recommends?

We are looking at Home Warranty of America, Landmark Home Warranty, Fidelity National, or 2-10 Home Buyers Warranty.

If you have any experience to share it'd be appreciated.

[Aquitaine]

The services contract out to local contractors, so 'the people who work for the services' can vary by area and day of the week.

There is usually a flat service charge when they come out. For us with American Home Warranty it was $60. We were buying an 18 year old house and the sellers paid for the warranty. It was nice but not life saving and the renewal rates were right on the border of being worth it to us.

If it's going to be your personal home, chances are you'll get a network of service people from the local Facebook or Nextdoor groups. The only way the warranty makes sense is if you have a reasonable expectation that something big (that is covered) will go - HVAC is one example where folks can save money but not all warranties cover HVAC.

In my view they fall on the 'not quite worth it' side but I wouldn't warn anyone off them.

[10scoachrick]

Technically, the seller pays for the first year of coverage. You choose. We used Olde Republic for two properties and got our money's worth from both. Didn't renew for third year at the house or second year at the townhouse. Our neighbor next door got a warranty claim covered just two weeks ago. A significant component of her A/C failed and it was covered except for the 'deductible'($75 IIRC). She came out WAY ahead by using the home warranty. Next year, she will have to decide if it's worth the $400 or so to renew.

Long story short, take the first year of coverage paid by the seller...then decide next year if you want to 'gamble'.

It's not going to cover maintenance issues...just catastrophic failure in most cases(A good example of catastrophic failure is your A/C going out on July 4th).

[Idlewile]

Do a search on this board; there are several threads on home warranties, when they are worth it and what companies are the best, all specific to Austin. I would not choose any of those companies. In a category where every provider gets terrible reviews, I would go with the best-rated of the worst -- Old Republic. I've spoken about our experience with them in those previous threads.

[austin-steve]

I would go with HWA, it's as good as you'll find in that type of industry.

It's a good idea to have one first year after a purchase, for both you and the seller. It prevents ill will in the event a major mechanical breakdown happens right after closing. Often buyers irrationally think the seller "must have known" the A/C was about to crap out and would want to sue. The home warranty kicks in instead, provided the unit was in working order when the sale closed.

steve

[mesmer]

The seller of our house gave us a one year home warranty. The furnace broke two weeks before it expired so we used it. We had to pay a little extra because other things needed to be replaced due to space constraints, but overall, we saved a ton.

[CptnRn]

If you are being asked to pay for this, read up on what the coverage actually provides. My experience with one of these 6-7 years ago was that the company was not obligated to replace equipment, toilets etc with one of equal quality. They installed the cheapest toilet they could buy to replace a higher quality one that had developed a crack and slow leak in the tank.

[TexasHorseLady]

Old Republic is the one that I feel most comfortable in this area recommending and don't worry as much when my clients choose it, because of past experience and their reputation among agents in the area.

[Don in Austin]

The purpose of home warranty companies is to make money for those that sell them. It is an inescapable fact that, on the average, home warranty purchaser loses, home warranty seller wins.

The sale of warranties is based on fear-mongering.

I will take my chances, thank you.

Don in Austin

[austin-steve]

Originally Posted by Don in Austin

The purpose of home warranty companies is to make money for those that sell them. It is an inescapable fact that, on the average, home warranty purchaser loses, home warranty seller wins.

The sale of warranties is based on fear-mongering.

I will take my chances, thank you.

Don in Austin

That's not true. It's like any form of "insurance". Most of the payers will never benefit because they won't have a claim. Those who do are glad they had it. And of course if the product wasn't a profitable product to offer, it wouldn't be available.

I just renewed my company's Professional Liability and Errors and Omissions Insurance. One of the questions on the application is whether all of our transactions include a Home Warranty. If we say "no", then the cost of our insurance is higher. This is because on transactions without a Home Warranty included, everyone is exposed to more risk in the event the A/C craps out a day after closing and the buyer wants to sue everyone.

Steve