Phoenix home warranties
Home warranty policies were once provided to buyers at the seller’s to cover repairs for unforeseen problems during the first year of ownership. For sellers, home warranties provided a way to address problems that may pop up after the buyer moves into the home that the seller may not have been aware of before selling the home.
If a problem does occur, the homebuyer can contact the home warranty company to have a problem repaired, provided it is covered by the policy, for a low service call fee.
However, once the buyer owns the home they are left to haggle with the home warranty company to get repairs going. The home warranty company has to ensure that the cost of making repairs does not exceed the cost of the home warranty. Many home warranty companies will not repair preexisting problems the seller should have been aware of and disclosed before the sale finalized. Buyers should have a property inspected before close of escrow on the property so that any problems can be discovered and taken back to the seller who can either offer to make the repair at the seller’s expense or add the repair to the home’s sale price.
A thorough home inspection should always be performed ahead of the sale by a qualified and experienced home inspector with a track record for recognizing symptoms or discovering evidence of past or potential problems. Still, it is sometimes impossible even for home inspectors to predict every potential problem from the summary of a 2 to 3 hour home inspection.
Buyers need to plan for the costs that home ownership incurs
How can buyers minimize the chance of problems surfacing after they take ownership of a home? To begin with, they must realize that there’s are costs affiliated with home ownership that can can’t always be predicted. The best approach is to plan and budget for common home repairs based on the home’s age, age of the roof, appliances, interior and exterior finishes, electrical system, plumbing, etc.
Not all home warranty companies are created equal
Shop around for a home warranty company that itemizes what problems do and don’t cover,
- Undetectable pre-existing conditions,
- Rust and corrosion,
- Lack of maintenance,
- Improper installation, repairs, and modifications
- Mismatched or incompatible components within the HVAC system
Resist purchasing a home warranty policy that fails to specifically state that your claim will not be denied for any of these problems as the cause of the claim you are making. Make sure the company’s repair cost limit per category does not significantly exceed the repair cost limit listed by other home warranty companies.
Repairs needed after the first year of home ownership
Is it smart to keep paying for a home warranty policy year after year, or should you cancel the policy after the first year and take on repair costs yourself as they arise? A home warranty policy may cover the cost to repair a leak in the roof, but eventually, a new roof will become necessary. Along those same lines, your home warranty may fix a dishwasher, but eventually, you’ll need a new dishwasher, garbage disposal, washer or dryer, etc. So, while the home warranty covers little repairs, it isn’t going to replace a problematic roof or appliance.
If the home warranty company discovers that they are losing money on your policy due to numerous repairs, they may deny renewal. If you’ve been paying on a home warranty policy for years and depended on it for repairs, you’ve probably spent a lot of money for the convenience.
Self-funding future repairs
Consider setting up a self-funding home repair account with the money you’d have otherwise spent on an annual home warranty policy plus the cost of two service call fees and use it to pay for repairs yourself as they become necessary.
If you own an older home, double or triple your self-funding account based on the home’s age when you purchased it and how soon you expect to need major repairs.
You can also opt to keep paying on a home warranty policy annually; some years there may be few repairs with minimal costs or no repairs at all, while other years you can have an expensive repair or two. Depending on what your home warranty policy covers, it may or may not be worth renewing annually. You can always do nothing and prepare to get out your credit card to finance repairs. Whichever option you choose, be prepared for the costs that are part and parcel to home ownership and enjoy your home.
Phoenix home warranties