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What should I know about home warranties?

There are many parts of a real estate contract that could work to your immediate benefit as you go through the process of purchasing your new home. However, you also want to think about problems you might have with appliances or plumbing after you move in. These problems could cost you a lot of money to repair. This is where a home warranty may be of benefit.

A home warranty provides coverage for home systems like electrical wiring, appliances and plumbing. Home warranties are not a part of every real estate contract, so they may not be familiar to you if you are buying your first home. Here are some important aspects of a home warranty to consider.

Sellers may entice you with warranties

Realtor points out that many sellers offer to pay for the first year of a home warranty. Sometimes sellers make these offers if they have problems moving a home because of its age or a downturned market. If you still like the home and the seller makes a verbal offer, a good next step is to make sure you have the warranty offer in writing as part of the purchase agreement.

Warranty plans can be flexible

There are different warranty plans available, so you have wiggle room to work out a warranty plan that fits your home. You might find that a warranty plan allows you to add on coverage for things like swimming pools or appliances. Some warranty plans allow you to build your own plan to cover the appliances and systems you want.

Warranties are not insurance

Some people confuse homeowners insurance with a home warranty, but they are not the same. Homeowners insurance covers the structure of a home and certain possessions in case of a disaster like a storm or a fire, while a home warranty focuses on your home systems like your plumbing. Also, home warranties do not require a disaster to provide coverage. A warranty can pay for a pipe or an appliance if it breaks from ordinary use.

You may still have to pay costs

A home warranty does not guarantee that you will pay nothing if an appliance or pipe breaks. Some contractors may require you to pay a deductible. You may also have to pay a portion of the bill apart from your home warranty deductible. You might run into other costs as well, like a service call or a service fee.

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