When can you buy a home warranty?
You are about to close on your first house. It’s been a whirlwind — securing financing and an insurance policy, scheduling viewings and inspections and navigating negotiations. Finally, all that is behind you, and you’ll soon be a homeowner.
But where does buying a home warranty plan fit in? Should you include it in the closing process or wait until after you move in?
The short answer is: You can buy a home warranty at any time, but it’s always better to get one sooner rather than later.
Why should you get a home warranty when buying a house?
A warranty plan supplements your homeowners insurance and covers the cost of issues that insurance doesn’t. It is an annual service agreement that covers the cost of repair or replacement for major appliances and home systems, such as your washing machine or hot water heater. When something goes wrong on a covered item, you pay a small fee to the service provider and the warranty covers the rest.
Whether you’re buying a well-loved house that is bound to need maintenance or a newly built home that comes with a limited warranty, there’s no way to know for sure when the regular wear and tear on appliances will turn into an urgent repair need. So, it makes sense for a buyer to put home warranty coverage on the “must-do” list when buying a house. The easiest way to do that is to include it in the closing process.
Before signing a service agreement with a warranty company, a buyer needs to be aware of the condition of the appliances and systems in their prospective home. This is where a home inspection comes in.
What inspections should you have before buying a home warranty?
Maintenance and repair issues are among the most common hidden costs of home ownership. A home inspection helps you estimate what those future maintenance issues will be and supplies crucial information about the structural, mechanical and overall condition of your prospective home.
An inspection might cover a visual assessment of some of the appliances in the house but doesn’t always involve a comprehensive mechanical inspection of all the appliances. You may need to add this on along with other specialty inspections for the roof, chimney, electrical system or other specific areas of concern, like checking for lead paint or mold.
Owners are not legally obligated to repair everything listed on the inspection report, but it’s in both the seller’s and the buyer’s interest to fix issues that affect safety or violate building codes, such as major structural flaws or electrical system problems. Other repairs are entirely negotiable.
This is important since a home warranty usually won’t cover detectable pre-existing conditions or repairs and replacement costs due to lack of regular maintenance. If an inspection report lists a problem that the original owner doesn’t repair before you buy, you won’t be able to claim it under your new plan after you’ve moved in. (Be sure to read your service agreement carefully.)
However, if you do require the seller to complete the repair and one of your appliances malfunctions after that, you usually will be eligible for coverage on items covered by your home warranty. While each service contract has different criteria for coverage regarding pre-existing conditions, proof of previous inspection and maintenance activities will make your claims process easier. Make sure your warranty company has a copy of the inspection report and receipts from completed repairs on file.
When are the best times to buy a home warranty?
Although it’s best to get a home warranty as soon as you become a homeowner, you can purchase a plan at any time during the buying, selling or home-owning experience.
When you’re buying
One of the best times to buy a home warranty is when you are closing on your first house. Realtor Sara Hopkins says, “It’s very common for a seller to pay this expense up front.” Sometimes, a home warranty company also offers discounts when a buyer purchases a plan during or within 30 days of closing.
When you’re selling
Including a home warranty in the sale of your house will be attractive to a buyer — especially first-time homebuyers, who are already juggling the many new expenses associated with home-buying. A warranty plan takes the potential cost of repairing appliances off their shoulders for at least the first year.
When your included warranty expires
New-construction homes often include limited-time warranties, but be sure to check the terms and conditions. Like homeowners insurance policies, many don’t cover appliances. Even if the structure of your home is still new, it doesn’t mean one of your appliances won’t go up in smoke unexpectedly. So, as soon as the builder’s warranty expires, reassess your coverage, and make sure your major appliances are protected. The same goes for the manufacturers’ warranties on your appliances — when they run out, a home warranty company can fill that gap in coverage.
When your needs change
When you remodel and add new appliances or systems to your home, consider buying a plan or upgrading your home protection. On top of standard coverage for the essentials, such as your kitchen appliances or water heater, you can also add coverage for repair and replacement of your new hot tub or smart home system. The cost of the plan and the small service fee you might pay when you need to make a claim are an easy way to protect these larger investments you’ve made to improve your home.
How to purchase a home warranty at any time
A warranty plan is a wise investment for both newly built homes and well-loved, older homes. It’s also a great option for current homeowners whose appliances are beyond their manufacturer’s warranty and likely have imminent repair needs.
Get an online quote and review the terms of the protection plan carefully before completing the service contract so you know for sure what the warranty covers. Warranty costs will depend on which company you choose, where you live and your coverage needs. A good warranty company will offer several coverage options, so choose the company and plan that best suit your family’s needs.