Real Estate Investment 101: Getting Started

Why You Should Ask For A Home Warranty When Buying A House

When you are the buyer of a house, you have the right to ask the seller for things. These things are often listed on the purchase offer as contingencies. If the seller accepts your offer, he or she must give you the things you asked for, and one thing you might want to ask for is a home warranty. A home warranty is something that sellers often include when selling their homes, and here are several things you should know about a home warranty.

What is a home warranty?

A home warranty is like an insurance policy on the systems and appliances in the home you are buying. It is not the same thing as homeowners insurance though. Instead, it provides coverage for things a homeowners insurance policy does not cover. The purpose of a home warranty is to offer protection for things such as your washer, dryer, stove, and refrigerator. Most home warranties will also provide coverage for the home's hot water heater, water pump, sump pump, and furnace. When you have a problem with these items, you can get the repairs completed for a fraction of the actual cost of repairs.

Why should you ask for a home warranty?

Asking for a home warranty is very common and standard in real estate purchases, and most sellers will agree to them, simply because they are not expensive to purchase in most cases. You should ask for one of these for several reasons. The first reason is that the seller will probably agree to it. While you could buy one yourself, you could save a few hundred dollars if the seller will pay for it.

Secondly, having a home warranty is a great way to add extra protection to the systems in your home and to your budget. With a home warranty, you will only have to pay a small amount of money if one of your appliances or systems breaks. If you did not have a home warranty, you would have to pay the full bill. With a home warranty, you can protect your budget against major expenses you were not planning for.

As you get ready to write up a purchase offer to buy a house, talk to your real estate agent about adding a home warranty contingency. Your agent can help you decide if this is a good idea, and he or she can help you determine other things to ask for too.