First-time Homebuyers should always get a “Good” Home Warranty!
First-time homebuyers: Don’t let unexpected repairs drain your hard-earned savings. A quality home warranty provides essential protection during your most financially vulnerable time, giving you peace of mind when major systems fail.
Here’s why you should get a GOOD home warranty:
A home warranty is a service contract that covers the repair or replacement of important home appliances and system components that may break down over time.
It’s different from homeowners’ insurance, which covers damage from events like fires or storms. A home warranty can be especially valuable for first-time homeowners, providing some financial protection against unexpected repair costs for things like heating systems, electrical systems, plumbing, and major appliances such as ovens, dishwashers, and refrigerators.
Most first-time buyers save for years to purchase their first home, and have used all of their savings just for the down payment and closing costs. This leaves first-buyers extremely vulnerable during their first year of homeownership.
If you have to replace a furnace in the winter or an air conditioning system in the summer, coming up with what could be thousands or even tens of thousands of dollars when you are at your most financially vulnerable will be a nightmare! It can cause you to miss payments and bills, damaging your credit.
Unexpected major expenses, such as replacing a malfunctioning furnace during winter or an air conditioning unit in summer, can cost thousands or even tens of thousands of dollars that you likely won’t have, and can be financially devastating.
It is always recommended that new homeowners purchase a good home warranty plan for at least the first year to cover such risks until they can rebuild their savings and establish an emergency fund.
When selecting a home warranty, it is crucial to choose a home warranty company that allows you to select and use your own contractors.
Many home warranty companies have their own contractor network that has national and/or local contracts who then hire the cheapest they can find, and you may wait a long time for your repair which may often be shoddy or of poor quality.
“All of us in the industry have lots of horror stories on these folks!”
Another Tip!
Be careful not to let others order your home warranty for you. Home Warranties are not all the same and many pay a commission or “finders fees” – so the person ordering your warranty may be more interested in earning a fee than getting you the best coverage. Do your own homework!
Home warranties are typically purchased in one-year increments, giving homeowners the option to renew based on their current financial situation and level of risk tolerance. Unlike a builder’s warranty that comes with new homes, a home warranty for a pre-owned home is more similar to an extended warranty one might buy with a used car, providing coverage tailored to the needs of homes that have had previous occupants. You can also customize them somewhat to save money by selecting the type and items covered such as pools, spas, etc..
We offer a special home warranty (and it can usually be added at no cost to you) that lets you choose your own contractor and repair personnel.
IMPORTANT WARNING:
What’s not covered by home warranties.
Understanding what is and what is not covered – this is where most problems and complaints occur.
Whether it is through ignorance, naivety or just outright lying to get a deal closed and a commission earned – many times first-time buyers are given unrealistic expectations of what a home warranty covers.
Some examples of this are:
Damaged Appliances
Items that are not in good working order – for example – The refrigerator is not working – “Don’t worry you are getting a home warranty – just file a claim after you close and they will replace it.” – This is grossly false – no one is going to replace any item that was already damaged or broken before you bought the warranty.
Old A/C
The air conditioning system is old and on its last legs… – again, you get told “not to worry because you are getting a home warranty”. The normal lifespan on these units (HVAC) is only ten years to begin with and it is now passed its useful economic life – a home warranty is not going to replace an old unit that already needed to be replaced beforehand.
Damaged or Old Roof
The roof is old and needs replacing. Home warranties are not going to cover an old roof – if a roof is damaged after you are in the home, then that is an issue for your homeowner’s insurance not a home warranty and if the roof is old and past its useful life then that is something that are going to have to budget for.
Again – Most first-time buyers save for years to purchase their first home and have used all of their savings just for the down payment and closing costs.
This leaves first-buyers extremely vulnerable financially during their first year of homeownership, and a major repair can be catastrophic.
So, yes, we always recommend getting a home warranty to protect yourself, but make sure you understand how it works and what it covers.
Our Commitment
When you work with House Karma, you can expect high-touch service from start to finish. Our Concierge Team ensures you’re supported throughout your real estate journey and follows up to make sure you’re satisfied with the experience.
We’re committed to eliminating the uncertainty, reducing the hassle, and getting deals closed quickly, for the amount you deserve. For you, that means less time, less trouble, and more money in your pocket when it’s all over.
Ready to experience the House Karma difference? Let us help you find your keys to the American Dream.