Home Warranties and Inspections - Warranties on used (1980) house

Our agent offered us a 3rd party warranty program for the house we hope to be buying. Are these worth their weight in paper? Is it mainly to cover if an appliance breaks or something like that? The plan was for like 300 dollars a year. Would I be better off saving that money in case something breaks?

It's a personal choice. I never buy home warrantees. They usually end up being more of a hassle dealing with them when needed then it's worth.

Waste of money most of the time, a few people will actually get their money back plus some, those rare birds are the ones that the home warranty companies have do their testimonials. The Real Estate agents are the ones that are really pushing the home warranty programs. They love it since if something comes up after closing they just use one of the patented answers.
Patented Answer #1 Well the home warranty should take care of that it is a good thing you have that.
Patented Answer #2 Well I sure wish that you had bought that home warranty that we had talked about.

Hi,

My hubby and I had the home warrenty for 4 years and used the plan "MAYBE" 2 or 3 times. The first year we didn't even knew we had it. Only found out about it when the re-newal came around. Anyway, it was NOT I repeat NOT worth it at all. We had to pay the $385.00 a year plus a $45.00 service fee to whoever came to the house to fix the AC or the tolet. No one can charge you more that $45.00 and the rest the plan picks up.

Last year we said "Good-bye" to the plan and it only cost us $25.00 to have someone come out and fix the AC unit and 3 months ago it cost us $35.00 to have a new tolet system put in with a matching sink to go with it. So we saved $385.00 plus $90.00.

But it's really up to you and what you feel you can do DIY wise and if you live in a city where labor is cheap.

Good luck to you!

I always request the seller pay for a one year third party warranty as a condition of the sale.... the price is negligible - and gives you some peace of mind when the A/C craps out in the first 9 months.... --- and have ALWAYS had that contingency accepted....

Ok, some good food for thought. Now riddle me this: I know from the inspection that the garbage disposal is bunk. Would it be worth it just to get that replaced? Would they even cover it if it was broken when I bought the house?

OOOHhhh It says it covers the exhaust fan too.... I know the bathroom one sounds horrible.

I think I might get it for a year, fix everything then drop it.

Maybe I should price a few garbage disposals.

I think I might get it for a year, fix everything then drop it.

Sounds like a very good plan. I should of done that when we had the plan.

Good Luck!

~Mylilprincess~

Complete waste of money IMO. I've had about 15 agents and/or sellers put the on houses I bought. Best I ever got out of one was a water heater, which would have cost me $110 and I'd have put it in after work. Instead I had to take off work TWICE, once so the guy could confirm it was indeed leaking, and again when he came out to repair it, and pay the $35 deductible on top of that.

Unless someone else is paying don't do it.

BTW, they're going to make a service call and charge you the deductible, which I think is $50 now, listen to the noisy bathroom fan, tell you they don't replace working items. Then you'll go to HD or Lowes and buy a new one for about $20 and install it in about 15 minutes.

Rather than pay any money I'd spend $75 getting a basic "home handyman" tool kit, then ask the guys at HD to show you how to install a garbage disposal. Much better investment!

frank

While I would do exactly as Frank does in my particular situation (and, if the seller didn't offer the warranty) - I should point out that I (and, obviously, Frank) are experienced DIYer's who can put in a exhaust fan in 15 - 20 minutes... There are those that need 15 - 20 minutes just to get the box open and find the english version of the instructions (Hey Marge - this stuff is all in Spanish.... ) - and a home warranty can be worthwhile for those folks....

Another thing to be aware of with home warranties is that the warranty company will try to complete the repairs as cheaply as possible. For example, if your A/C dies, the warranty company will replace it with the cheapest model they can find, and use the cheapest contractor in the area. They may try to "patch" things together, rather than doing a proper repair or total replacement. You're better off having total control over repair issues concerning your home, rather than letting a warranty company dictate how work will be performed (if indeed, they do agree to perform any work).

I always request that a seller offer one when I'm listing their home simply because it's inexpensive and it's a great marketing incentive for advertising purposes (particularly in this flat market).

I also make it a normal demand upon the seller if I represent a buyer because it instills a little extra confidence and does occasionally come in handy for a surprise repair. Some versions are better than others in how they work.

Your agent shouldn't be trying to sell you a policy, they should be negotiating it as a seller-paid item on your behalf. IMO, Sounds like you need to kick your agent in the duff a little.

AFineFix let ole MrFixit quess here........ YOU ARE A REAL ESTATE AGENT???? Yup you folks just ask yourself who really does benefit from the home warranty policy most of the time. I think the real estate agents should furnish (pay for) the Home warranty policies then we would get a more real world evaluation of its actual value LOL

Mr Fixit is right. A seller or buyer can demand that the warranty be paid for by an agent out of his/her commission at the close of escrow (or it's equivalent) if the seller is not interested in negotiating to offer it. A smart agent would provide it.

Thezster is also right, a buyer should insist on the seller providing a warranty.

In the original post, "jdubbya" (a buyer) has a situation where his agent is attempting to sell him a warranty separate from the transaction. Either his agent didn't bother to demand one from the seller, or he tried and failed. The post doesn't say. Personally, I think that jdubbya should tell his agent to negotiate for one to be provided by the seller. If there is a genuine attempt, and it fails, then jdubbya could request that his agent pay for one. It sounded like jdubbya was not interested in paying for it himself, and I tend to agree with him.

As a broker, I don't directly benefit from a home warranty. I don't get a cut of the action or a free trip to St. John's, although that would be pretty cool. Oh, speaking of an earlier post, technically, if you know the garbage disposal (or "insert covered appliance here") is dead before you buy the house and then make a claim, that may qualify as insurance fraud. I have heard this technique suggested more than once by agents, which potentially makes them a party to fraud of course. Rule of thumb: If it's written in the disclosures, be careful.

For the buyer the warranty is meant to give them some piece of mind, and hopefully save them some bucks if it works according to plan. For the seller it's an inexpensive marketing incentive, nothing more, although a couple of companies offer to include the escrow period as a covered term, which then may benefit the seller as well if something goes kablooey at that time.

If a home buyer receives a home warranty as part of the negotiations, the buyer benefits (if the repairs and so forth go well) if it's needed. If they don't use it, no big deal, no money spent.

If a seller has an easier time selling their home, or is able to hold up their price because the buyer liked the fact that a warranty is part of the deal, then the seller benefits.

Lawsuits benefit no one. The warranty can act as a cushion against disputes over disclosures and so forth. Did the seller know that the water heater was about to blow it's top? Did the home inspector note that the garage door opener movement detector or resistance reversal mechanism was inop? If the warranty repairs the problem, a lawsuit might be avoided. There is no "patented answer". Each transaction is different and each problem that might appear after the close of the deal is also very different.

Are home warranties worth it? Some are better than others, but for the small amount of money involved I think that they are a pretty good option to have available. The deductible may be high for what might be an easy repair (at least for us DIYers) and the service might be crappy, or they might argue the need to fix a noisy bathroom fan, and someone needs to be at home to make sure the guy can get in and leave (without taking your best bottle of whiskey with him), but problems of all sorts occasionally happen when people hire contractors anyway. I've also experienced cases where an HVAC furnace or A/C section, water heaters, garbage disposals and so forth were replaced, the service company did a good job and the warranty-holder was an extremely happy camper.

One flaw in the home warranty process is that these companies have to develop a network of contractors, but they may know very little about them because these warranty companies cover so much territory, nationwide in some cases. Quality control becomes a big problem.

Looking at home warranties from a DIYer's point of view can tilt the perception of what they are meant to do and who they are meant to benefit.

The house is a forclosure being sold by the bank with no disclosure statement.

The bank is already paying 5000 dollars of my closing costs so Im not gonna get worked up over 300 dollars.

I wish regulators would address this -- a "home warranty" is not a true warranty, but an insurance policy. (A true warranty allows you to return or repair the product at no cost.) They should be regulated by the state insurance commissioner, but they're not.

If purchasers knew what they really were, they probably wouldn't buy them, especially if they were to learn that they aren't underwritten as regulated insurance policies are required to be.

Meaning that they're not worth the paper they're printed on. Far from providing "peace of mind," they provide a false sense of security exploited by the listing agent (who are the only ones who really promote this scam).

You want a real sense of security? Pay for a thorough inspection by a qualified inspector and negotiate the corrections before you buy.

Excellent posts about Home Warranties! They indeed aren't worth the paper they're printed on, they're a gimmick.

The seller / agent offered home warranty covers issues for a few months after purchase but read the fine print. The repairs done under these warranties are not long term fixes. The repairs are duct tape, wood screws and caulk.

Example: You find a leak in your roof the reality is you need a partial or full tear off, replacement of some sheeting, proper felt replacement, flashing and new shingle. The warranty will be a $200 patch job that will lull you into a false sense of security when it really needs repairs in a workmanlike manner.

The warranties NEVER involve replacements and almost always are a quick-fix. That is not a warranty, that is not carpentry, that is not a union electrician, it IS A BANDAID.

In closing, the work performed under a home warranty would never be the work you'd pay good money for.

Regards,

Rookhawk

I'm with the consensus...they aren't worth much. I did get a new hot water heater out of ours about 9 mos. after we bought. But when we had the a/c condensor unit (outside) start getting flaky, the stupid kid came out and suggested we "top off the freon". Never fall into that trap. If it has a leak, fix the leak and refill it. Topping off can overcharge a system and ruin compressor.