Source: Texas Realtors®
WHAT DO THEY COVER?
Home warranties—also referred to as residential service contracts—help pay to fix or replace home systems and appliances that have unexpected mechanical issues due to normal wear and tear. Home warranties don’t cover known, pre-existing conditions.
WHY ARE THEY USEFUL?
Some consumers think home warranties are useless and won’t pay for anything. But the payout on a home warranty depends on the specifics of a situation.
Homeowners may find that a $500 policy could pay out a few thousand dollars if they file successful claims.
Some people think nothing of paying hundreds for an extended warranty on a refrigerator, but a home warranty would do the same thing for all of their appliances and systems.
Home warranties can help first-time and low-income homebuyers the most. These buyers may have poured every penny they have into their home.
“Not having the warranty could be a huge financial burden if there’s an unexpected expense,” she says. “If the A/C breaks and it takes $5,000 to $10,000 to replace it, or it costs $700 to add Freon, that’s a problem for them. They may need to go without until they get their funds together or use credit or borrow the money.” says Kimberly Azpeitia, Choice Home Warranty senior account manager.
But home warranties aren’t just for first-time homebuyers or buyers alone. Existing homeowners can add a policy. Landlords and property managers can buy policies. Sellers can even add a policy while they’re listing their homes as an incentive to buyers or to provide buyers more peace of mind.