is the "Residential Service Contracts" AKA "Home Warranty" necessary when buying a condo apartment? (Houston: HOA, home owners insurance)

[giveitaname]

Is it necessary?
Is it mandatory?
And what is the difference between the Home Warranty and the home insurance? the same thing but two names?
Thanks

[trbstang]

Totally different. A Home Warranty usually covers the function of your appliances, AC/heat system, water heater, etc. things that can break down and cost a bit to repair or replace. Usually you get it for a bit of "peace of mind" during your first year in a new place, and it can be renewed but can be costly and may not cover everything and will have deductables before they will pay. Not 100% sure on a condo, but if everything is segregated by individual units, the condo association would not be responsible for repairs of these items, you would.

You home insurance covers your home against damage from storms, fire, theft, water damage (not floods) and the like. Home insurance is mandatory if a home is financed, but a home warranty is not required.

[dalparadise]

Moreover, you should be able to negotiate to have the seller pay for your first year of home warranty premiums.

[heightsian]

Home warranty covers the insides of your house, i.e. the appliances, plumbing, etc, while home insurance covers the structure.

I would skip the home warranty. We bought a home warranty and the seller paid for part of it and we upgraded the coverage. Wish we could have that $150 back. First time we had a problem, called the home warranty people and they said for $60, they would send someone out to fix it. Explained the problem over the phone completely -- a piece of the drain cover had fallen into the pipe and was causing the bathtub to back up and since we're on pier and beam, someone will need to go underneath the house to fix it. I was assured it was all covered, no problem. They send their guy (you don't get to pick who comes) and he shows up with a bottle of Drano. Seriously. $60 for him to show up with Drano. I'm not plumber but Drano isn't going to move a solid piece of metal in a pipe. When we reiterated the problem, suddenly the quote to fix it was $800 plus $200 to crawl underneath the house. Paid the guy $60, sent him on his way, and got another plumber to do the job for $200. We've never called the home warranty people since and let the policy lapse at the one year mark after hearing similar horror stories from friends.

Google the name of the company you're thinking about going with and see what their reputation is. I wish we had done that.

[giveitaname]

In my opinion, since it is an apartment/condo buying, the HOA fee (maintenance fee) should cover the exterior of the buildings, the home insurance should cover the interiors, and the Home warranty should be totally optional and not necessary.

[dalparadise]

Originally Posted by heightsian

Home warranty covers the insides of your house, i.e. the appliances, plumbing, etc, while home insurance covers the structure.

I would skip the home warranty. We bought a home warranty and the seller paid for part of it and we upgraded the coverage. Wish we could have that $150 back. First time we had a problem, called the home warranty people and they said for $60, they would send someone out to fix it. Explained the problem over the phone completely -- a piece of the drain cover had fallen into the pipe and was causing the bathtub to back up and since we're on pier and beam, someone will need to go underneath the house to fix it. I was assured it was all covered, no problem. They send their guy (you don't get to pick who comes) and he shows up with a bottle of Drano. Seriously. $60 for him to show up with Drano. I'm not plumber but Drano isn't going to move a solid piece of metal in a pipe. When we reiterated the problem, suddenly the quote to fix it was $800 plus $200 to crawl underneath the house. Paid the guy $60, sent him on his way, and got another plumber to do the job for $200. We've never called the home warranty people since and let the policy lapse at the one year mark after hearing similar horror stories from friends.

Google the name of the company you're thinking about going with and see what their reputation is. I wish we had done that.

A good one should be closer to $300 per year, if memory serves. I got my swimming pool heater rebuilt- close to $900 worth of work for a $25 deductible because I had one. I was skeptical, too, but after that experience, I think it's a good deal. I believe mine was American Home Shield.

[predatorprey]

I've had one for a number of years now. When I purchased my home it had old AC and Furnace units. Now they are all new. It paid the first $1500 for each of the units.

So has been a good deal for me so far...

[jordanaf]

Have the seller pay for it. And be careful which one you get. Your Realtor should be able to recommend a couple. Don't expect them to take care of everything as they are a business and some of them will try to wiggle out of repairs. They come in handy if you don't know contractors that you can call. Homeowners insurance is not optional if you are financing.

[colcat]

If your AC and appliances are old, I would opt for the warranty. At least for now. I cancelled my warranty after they gave me the run around with properly fixing my AC. They came out 5 times last summer to "fix" it and finally I had an AC repairman( paid for by me) to diagnose what the real problem is. I then called the warranty service and insisted that they fix it correctly. Bottom line, they do the bare minimum to fix it until it completely breaks, Very inconvenient in Houston summers.

[Ashley J]

Is a homes warranty necessary? Yes, for home owners who want coverage on home systems and appliance repair.
Is it mandatory? Home owners insurance coverage may be required by your lender, but home warranty is not. For example a home warranty plan from TotalProtect covers approved appliance repairs and replacements while Geico home owners insurance may cover fire damage, theft etc.