What are home warranties and when should a homeowner consider getting one?
A: â€œBuying a home is a major investment and many buyers use most of their available cash to complete the purchase. Plumbing, electrical and heating issues, including breakdown of the hot water heater, furnace and appliances, can be quite costly at a time when significant assets have been invested in your home.
A home warranty can make your life less stressful at a relatively low cost.
It is important to realize that the package is not actually a warranty but rather a service contract that promises to repair or replace covered damaged appliances and systems. Home warranties are particularly valuable in properties with older appliances and our usual recommendation is a one-year warranty. Sellers can also purchase coverage which typically covers many issues that may arise during the marketing and escrow periods in addition to one year of coverage commencing at closing.
We usually recommend that buyers consider purchasing a home warranty with the exception of new construction when appliances, and often the property itself, are covered by warranties. As a general rule buyers and sellers cannot go wrong by purchasing a home warranty. We believe that it is better to be safe than sorry.â€
Appeared in San Francisco Chronicle, June 25, 2017