Home warranty - needed or not? (Howe: insuring, appliances, first time home buyer)

[ashtank]

We are first time home buyers and are currently in pending contract status on our house (1996 built).

It was a bidding war and we didn't negotiate the 1st yr home warranty from the seller. So our contract doesn't ask the seller to pay for 1st yr warranty.

We are going to buy a new washer, dryer, microwave, and refrigerator when we move in. So these will have their own manufacturer's warranty. All HVACs are replaced in 2016. Water heaters are 10 years old. The home inspection report was great. No obvious issues on the report. We do have a pool. And the pool heater was a bit rusty, but still working condition as per pool inspector report.

What else is covered by a home warranty that we should be worried about?
Is it possible that we do not take warranty now at closing, but maybe after a couple years feel the need and take it then?
Any recommendations for home warranty companies/plans?
Any tips/recommendations will be very helpful. Thanks!

[oldoak2000]

Home warranties are a scam; google it: IF your hvac needs $400 worth of work, THEY will tell you it needs $1200 worth of work and that the 'policy' will pay for $600 of it (making you PAY MORE for the $400 repair than just calling a REAL ac guy out yourself)!!! They will NEVER pay fully to replace an older broken unit of whatever with a 'new one' - they'll say NEW unit is $6000 and old unit value = $2000 so you get to PAY $4000 (meanwhile you coulda got new unit YOURSELF for $3000!!! ) Quite a scam!!

Put the $400/year into a 'home repair' account YOURSELF - then YOU have the REAL POWER to negotiate repairs when they are really needed!

[jdallas]

I wouldn't recommend any. They are all pretty rubbish. That said, you will receive lots of offers in the mail after you move in to your home so there will be ample opportunity later to purchase one if you prefer.

[Aggielina]

I wouldn't do it. I had one on my old house, and it seemed like they just came up with excuses for why they wouldn't replace things that clearly needed replacing. Never again.

[BigDGeek]

Mine pays for itself every year, though sometimes I have to kick up a fuss to get them to cover things.

[Katana49]

Not all home warranties are a scam, it depends on the company you go with and the problem that you are wanting them to cover.

That being said, in your case I wouldn't worry about it at all. You're getting all new appliances, you have new HVAC, so those are the big ticket items that shouldn't have anything go wrong.

I've had two homes where the home warranty either paid for itself or saved me money. The first home had a fan unit and a capacitor fail on our AC. Total cost to repair was about $250, but we only paid a $50 service call fee. Same home, we also had the control unit/display on our washing machine go out. That was a $300 repair, but we only paid for the service charge again. Considering we didn't pay for the home warranty, that worked out well for us, and the cost to fix those issues was more than the cost of the policy.

Another home I've had the ac coils replaced, but ultimately if I had paid for the warranty I would have lost money, as the repair cost about $300 and the policy was $400 IIRC. However, it was included by the seller, so didn't matter to me.

[TheOverdog]

I never had much luck with a home warranty either, so I let ours expire after 1 year. I think we used it once and paid an additional $60 for a plumber to snake a drain (on top of the $400 cost of the Warranty). A plumber snaking a drain is a $100-$200 cost without a warranty.

[esk1]

The only time I have ever bought them is when purchasing a house since they are usually seller provided. From my experience the only time they pay for themselves is if you have a AC issue and can get them to replace it. Because you still pay a service charge every time someone comes out it takes a few issues every year to break even. That being said some people like the piece of mind of having one and if you aren't going to do anything around your house yourself you might break even faster than others at the expense of cash out of your pocket on repairs. Based on your description I would not buy one unless you are the type of person that doesn't keep enough in savings to ride through issues as they arise.

[globe9]

We let ours expire after the first year. Sellers paid for it. We haven't had any problems with big repairs in the 5 years since we bought the house. We've maybe spent $200 on minor repairs in 5 years. In my opinion, your better off putting money away and "self-insuring"

[UnfairPark]

I don't carry it any more.