Are Home Warranties Worth it?

by Isaac Benmergui, Esq on June 8, 2017

home warrantiesOne way to compete in a competitive market is to be the consummate low-maintenance homebuyer. Don’t ask for special contingencies, appliances that weren’t originally includes, overly long or short closing date, or other special considerations. The best offer is one that’s on point for the average sales price for the comps and is tailored to the seller’s needs.

You obviously don’t want to cut contingencies for important items like the inspection, mortgage approval, or other items that could put your financial well-being in jeopardy. But one thing you could cut that might get the seller’s attention: the home warranty.

For the past few years it’s been customary that the seller offer a home warranty to cover any items that might break or go out right after the sale. But are they really that helpful?

A home warranty isn’t insurance, it’s a service contract that states if you pay a premium, usually around $400 or so annually, you can order service or repairs through the warranty company and pay a flat fee, usually under $100. The warranty covers repairs on things like the HVAC system, plumbing, electrical, water heater, but nothing specialized, like a pool or hot tub, and not any of the appliances that may have come with your home, like the dishwasher or garbage disposal, although additions to your coverage could cover those items as well.

You may not need the home warranty. Most appliances and systems come with their own one-year or more warranties, so be sure to ask how old things like the AC or garage door opener are. Most states also require builders to warranty the structural elements of their home for up to 10 years as well.

Finally, look at what it may cost you, based on the oldest appliances or systems most likely to need replacement, to have items repaired without a warranty. If you have a cash reserve left after closing, leaving the warranty off may not cost you that much money while helping you close the deal on the home you want.

Call Miami Real Estate Lawyer Isaac Benmergui at 305.397.8547 and set up a no charge, no obligation consultation to discuss your case. We have over a decade of experience handling Real Estate and Civil Litigation cases throughout Miami and South Florida, and will use our expertise to help your case to the best of our abilities.

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