Home warranty (offering, repairs, company, seller)
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I always ask for a home warranty when presenting an offer. If the seller refuses to offer one, I provide it for the buyer. It gives me peace of mind that I will not be responsible if anything goes wrong in the first year. I recently had to use the warranty on my home purchased in February 2007 and saved over $2500 on the repair (HVAC). The new federal requirement is that if your HVAC cannot be repaired, you must replace it with a 13 SEERS unit. When I was having my unit repaired I asked how much it would cost to replace the existing unit (20 years old) with a 13 SEERS. I was told that they have to replace 90% (air handlers, condensor units, copper lines, etc) of the existing installation. The price they quoted was $12,000. It makes economic sense for me to continue paying $400 per year as an insurance factor. If my unit lasts another 30 years, I will break even. If it breaks down earlier, I haved saved a substantial amount of money.
That's a very good point Belmarin, it's those big items that are the most costly. My husband got a new air conditioner in our old house when the other one died of old age. Our new house has a furnace issue but it's due to not being maintained and they won't cover that. We're paying for someone to come in and service it to get it back to the shape it should be in. The furnace is 18 years old so in a few years when it does die of old age (and those were the AHS person's words, not mine!) then they will cover the replacement.
Defiance, I don't believe the warranty covers any work done structurally. While they probably should have covered the flooring work because it was directly related to the plumbing, technically according to their paperwork they don't have to. I don't know what else they wouldn't cover, but we haven't had any issues with them in 8 years not covering things. The only thing they said they couldn't cover was a leaking gas pipe out on our porch, because we weren't covered for the outside of the house. Had we known it was because something wasn't capped correctly in the chimney we would have called them back, but we got it fixed and it wasn't that big of a deal.
I may be incorrect, but I think things like damage from leaks and flooding would be covered under your homeowners insurance policy. If it's an appliance or built in type home product/item, then the product itself should be covered unders most Home warranties, if you have one. Of course each homeowner's insurance policy and home warranty is going to be different.
As far as general pipes being under warranty....that's a new one (to me at least). Repairs to the damage from the leak might be covered under one or the other, but the pipe itself may not.
We had a similar problem with a shower pan. The pan just fell apart and we had flooding through the walls etc. The tile and carpet and labor was all covered under our home owners insurance, but replacing the pan itself was not.
I have heard mixed things on these. I know this may have been asked before, but I can't find it.
We have the option to purchase one. I have one agent tell me they are a big waste of money and another say they are helpful.
What do you all think?
yes yes yes yes yes
even new homes have issues and sometimes builders are not as punctual as we would like them to be
and inspector are only human and can miss something they can only determine things that are visible
They're well worth the money. It's a very cheap insurance policy for you.
Just make sure you get a good company, because their service is all very, very different. I've had the best luck with Best Home Warranty. There are other good ones out there too, but there are some horrible ones.
For the most part they do tend to be a waste. It is liek the warranties issued with new appliances at Best Buy. The reality is that most of the equipment will not break in the first year. If you are buying a 10-15 yr old home it may pay off but know this. The maximum repair cost will be $500. So you spend $350-$375 ( the realtor / broker makes $75 of this) then if your furnace take a dive the most the warranty company will pay is the $500. Oh yea remember they charge you $25-75 to come out for each visit. I have had some sellers provide the policies in our negotiations but it gives more peace of mind than real coverage. When one client of mine was faced with a furnace we had to call the warranty company on they came out 7 times and did not resolve the issue he had to get a regular company out to replace the furnace and then afterwards the warranty company paid him the $500 of the $2700 spent. The warranty company tried to patch the system together than do the right thing. I would vote save your money.
For the most part they do tend to be a waste. It is liek the warranties issued with new appliances at Best Buy. The reality is that most of the equipment will not break in the first year. If you are buying a 10-15 yr old home it may pay off but know this. The maximum repair cost will be $500. So you spend $350-$375 ( the realtor / broker makes $75 of this) then if your furnace take a dive the most the warranty company will pay is the $500. Oh yea remember they charge you $25-75 to come out for each visit. I have had some sellers provide the policies in our negotiations but it gives more peace of mind than real coverage. When one client of mine was faced with a furnace we had to call the warranty company on they came out 7 times and did not resolve the issue he had to get a regular company out to replace the furnace and then afterwards the warranty company paid him the $500 of the $2700 spent. The warranty company tried to patch the system together than do the right thing. I would vote save your money.
You are dealing with some sort of a flakey company. Multipe thousand claims are reasonably normal on home warrantees. Had one client who replaced one of a pair of AC units for some $3500. He had to pay some $500 for new bracketry and sheet metal but the new AC was covered.
The only annoying one I have come across is AHS refusing to pay over failure to maintain the unit. Claimed that the condenser was plugged with garbage. The advice is have heavy A/C checked once a year for about $100.
Its like anything, I've both good and bad experiences with home warranties. Personally, on homes that I have owned, I've found them to be very cost effective and was ultimately GLAD that I invested the money to renew it.
As a Realtor, I had the experience where a client was NOT ultimately protected because the company used the "not in working order at the time of purchase" which we all thought was wrong...because the defect had been 'in place' but undetected by at least 3 inspectors over the years.
AHS is probably the most common, but as someone said earlier, there ARE other companies out there...check them out as well.
As a buyer, it is always appropriate to ASK for it, costs the seller almost nothing as a percentage of the sale...and provides some extra protection. As a SELLER, it can have the effect of making your house stand out from the crowd (although not a huge impact for most buyers in terms of differentiation). I think that Belmarin has the best point...it is definitely a tool that your REALTOR can use to stand out from the crowd.
One "Did You Know" note for Realtors out there; check the Code of Ethics...if you are getting a commission from the insurance company for "selling" a policy, you should disclose it to your clients...although I know many of us (you) pass that savings directly to our clients.
I had AHS for two years, had the riders for washer/dryer and the one for higher rated efficiency HVAC. It was great...until I needed to use it for more than a stove burner replacement or switch in my dryer. Never again.
There are some message boards devoted to them.
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