If you’re buying a home for sale in Scottsdale, you may be thinking about buying a home warranty – but what is a home warranty, how much does it cost, and what’s it good for? Here’s what you need to know.
What is a Home Warranty?
A home warranty, also called a home protection plan, can cover several systems and items in a house. It’s a sort of insurance against things breaking from normal wear-and-tear, although most home warranty plans charge you a deductible for service appointments.
A home warranty can cover:
- Air conditioning and heating systems
- Ceiling fans
- Dishwashers
- Doorbells
- Ductwork
- Electrical systems
- Garbage disposals
- Plumbing issues
- Ranges and ovens
Every plan is different, so if you’re thinking about getting a home warranty, make sure you ask questions about what’s covered – and what’s not. Some home warranty plans won’t cover very specific items, such as spas and pools (unless you buy separate coverage), refrigerators and other appliances, and other components.
How Does a Home Warranty Work?
A home warranty is a little bit like an insurance policy. You buy the coverage that meets your needs, and if something goes wrong once your policy is in place, you call the home warranty company to tell them about it.
The home warranty company will most likely charge you a deductible (again, every policy is different) to send a licensed contractor to your home to diagnose the issue. The contractor will write up an estimate for the repairs or replacement and submit it to the home warranty company, which will then pay to fix the issue (as long as it’s covered by the policy).
Most home warranties won’t pay for problems that result from:
- Bad installation
- Code violations
- Excessive wear-and-tear
- Improper maintenance
- Preexisting conditions that are disclosed in a home inspection
How Much Does a Home Warranty Cost?
Home warranties vary pretty widely in price, so it’s a good idea to talk to more than one company if you’re thinking about purchasing one. Sometimes the amount of coverage doesn’t have much to do with the price, which means you have to shop around to get the best coverage at the best price.
Typically, a home warranty costs between $300 and $750 per year, depending on your location. It can even vary by neighborhood.
If you don’t know where to begin, talk to your Scottsdale real estate agent. He or she will be able to refer you to a good home warranty company that his or her other clients have used – and have been happy with – in the past. Sometimes sellers pay for a one-year home warranty, as well. Talk to your agent about the possibility of the seller buying a home warranty for you, because it could help you get the peace-of-mind you need when you're buying an existing home.
