(Blog) Keeping it Real (Estate) with Deanna - To Buy or Not to Buy a Home Warranty

A home warranty can be a very good thing, especially if you’re purchasing an older home.

In a nutshell, a home warranty protects a buyer from unexpected repairs (and at times even replacements) of a home’s major systems and appliances.

It is often a great item for a first time home buyer who is using the majority of their funds to get into their home.  If the furnace, central air, water heater, refrigerator, plumbing or oven goes out they are covered. Instead of paying a big repair bill they pay a small deductible, usually $75-$100, depending upon how the contract is written.  A home warranty is good for a year from the time of the sale. 

Warranties usually run about $350 to $450 depending upon type of home and coverage.  It can be negotiated in a purchase contract for the seller to pay the home warranty at closing for the buyer.

Some sellers will choose to put a home warranty on their home to give them a selling advantage.  Often times, companies will give free listing coverage so the seller only has to pay when the home closes, and yet can use the coverage if they need to before then.

I personally have had clients use the warranty for broken thermostats, furnaces, refrigerators, and ovens.  It can be a great tool. 

Is a warranty necessary for new construction?  As appliances in new homes come with warranties, and the builder gives a one year warranty (as per state law) it is not as important for a new home.  However, for an older home it’s a small price for a lot of peace of mind.

Have a real estate question?  Send it my way!

Thanks!

Deanna

Deanna Howard, Realtor, SFR, CREN

Iowa Realty
752 10th Street
Marion, Iowa 52302
(319) 929-3836

dhoward@iowarealty.com

www.deannahoward.com

Licensed in the State of Iowa