One of the key things first time home buyers should do is look into home warranties. A home warranty works similarly to warranties that you have on your vehicle or your appliances. You wouldn't buy a new car or an appliance without a warranty, so why would you make the biggest purchase of your life and not get a warranty? Home warranties cover a variety of major repairs that may happen after you purchase the house. Home warranties are available for both new homes and older homes.
Either the buyer or seller can purchase a home warranty. If the seller has purchased the home warranty, it's because they are trying to secure their pricing on the home and sell their home faster. As a buyer, you would purchase a home warranty as a safe guard against any major reparations that need to be done to the home that you couldn't see, or tell, when you purchased the house.
Regardless of who purchased the home warranty, it is important to look at the coverage that is offered by the company. Coverage varies from company to company and state to state. When you talk to a home warranty agent, or look at the sellers' policy, be sure to ask what is and is not covered on your home warranty specifically.
Most home warranties will cover:
- Air conditioning system
- Built in dishwasher
- Built in microwave
- Built in trash compactor
- Ceiling fans
- Central heating unit
- Duct work
- Electrical systems
- Garbage disposal unit
- Plumbing systems
- Refrigerator
- The oven or range
- Washer and dryer
- Water heater
Most of everything else is not covered. This includes:
- Outdoor sprinkler systems
- Outdoor water systems
- Faucet repairs (unless otherwise stated in the policy)
- Spas (you can request/add this coverage in some cases)
- Pools (you can request/add this coverage in some cases)
- Hot tubs (you can request/add this coverage in some cases)
- Permit fees
- Hauling away debris
- Hauling away old appliances
It's also important to find out when a request would be denied. There are plenty of reasons why a home warranty would be considered void, including:
- Improper maintenance
- Improper installation
- Code violations
- Unusual wear and tear
It is a good idea, when you buy your first home, that you have an inspection done on the house to ensure that it is properly up to the building codes and that there are no code violations and that the major systems and appliances in the house are properly installed and that they've been properly maintained.
Buying a home can be so exciting that you may jump at the first house that meets your needs and your budget - many people have been there. It's always a good idea to take a step back from the situation and really look at the house - is this where you want to live for at least the next three to five years? Is it what you hoped it would be? Are there other homes that you are considering?
In some cases, having a home warranty can make or break the decision to purchase your first home. Most often, first time home buyers aren't entirely up on what they are taking on - there's no landlord to call if the pipes burst - that's for you to handle. No heat? No hot water? You have to pay to replace and fix those items. These items cost up to thousands of dollars - do you have the money to fix and replace these major items, such as the electrical system, major appliance, hot water heater or furnace if they should stop working? This is why it's always a good idea, especially for first time home buyers, to purchase a home warranty to protect them from the sometimes incredible expense that is associated with owning your own home. When you look for a home warranty, be sure to ask lots of questions and get a few quotes so you can compare the coverage on the home warranties and the rates that you will be charged.
