Our last post was “My offer was accepted! What inspections can I do?” Today we are going to discuss what a home warranty is and how it can be used when purchasing a home.
Home warranties are typically provided by third parties and are designed to give the buyer peace of mind when purchasing a pre-owned home. Usually, there is an up front cost for purchasing the warranty and then a deductible per occurrence. For instance, American Home Shield offers a plan that will cover new owners for 12 months. The up front cost is $390 and the deductible per occurence is $60. American Home Shield’s plan covers heating, air conditioning, ductwork, plumbing, plumbing stoppages (visit www.plumbers-portsmouth.co.uk to learn more), water heaters, electrical, built-in microwaves, dishwashers, garbage disposals, ranges, trash compactors, 13 SEER, sediment, rust and corrosion, and insufficiently maintained equipment.
Purchasing a pre-owned home can often bring about concerns for older mechanical equipment or unknown issues in the home. Home warranties may help in easing these pains. Sellers often will offer home warranties to buyers as a way to encourage buyers and ease their concerns. In these cases the sellers pay the up front cost of $390 and the buyers pay the $60 deductible per occurrence when something goes wrong in the first year. If the seller is not offering a home warranty to the buyer, the buyer may request a home warranty be provided as part of the sale of the house. Here too, the sellers pay the up front cost of $390 and the buyers pay the $60 deductible per occurrence when something goes wrong in the first year. Buyers may also purchase home warranties for themselves. In this case, the buyer pays the $390 up front cost and the $60 deductible per occurrence.