When you purchase a house, you may be offered a home warranty. While it may seem that a warranty is the same as a homeowner’s insurance, it is not. A home warranty offers you discounted repairs and replacements of major components of the house. It is a contract between the warranty company and the homeowner. 

What’s worth noting here is that warranty companies offer discounts only for approved service providers and cover specific issues alone. Many sellers buy the warranty for the buyer to give further assurance before or after a home inspection in Monmouth County NJ. Let’s now quickly look at the benefits and drawbacks of home warranties. 

What is the cost of a home warranty?

A home warranty can cost you several hundred dollars a year. This payment may be upfront or in installment, depending on the warranter’s payment plans. The cost depends on the property type and whether the plan chosen is an extended one or a basic one. 

The age and the size of the property generally don’t affect the rates, special cases experience some variation in rates. For instance, if the house is brand new, the house is charged more. Similarly, properties that are more than 500 sq. feet cause price variation. Homeowners must note that the basic policy doesn’t cover separate structures. 

Benefits of a home warranty

  • Protects against expensive repairs: Expensive repair can eat away at your savings. Here, a home warranty can help save costs. 
  • Acts as a financial buffer: A home warranty is a great option for those who have depleted their savings on the property purchase and don’t wish to spend more. 
  • Assures the buyer: During property purchase, a home warranty assures a buyer of the house’s condition, thereby speeding up the sale.
  • Protects the seller: In the event of buyer complaints after sale closing, a home warranty with one-year coverage can protect the seller from spending too much. 

Drawbacks of a home warranty

  • Proper maintenance: The biggest drawback of the home warranty is that the warranty company only covers items that are maintained properly. The definition of well-maintained, however, can be murky, leading to disagreements. 
  • Restricted choices: Home warranty companies often have approved service providers and brands that you can use during replacement and repair. Going beyond these will result in zero coverage by the warranty company. 

Conclusion

Getting a home warranty protects you from expensive repairs through discounts. At the same time, you will be able to convince your buyers to close the sale quickly. However, you can only choose certain vendors and brands for your repairs, and not every item is going to be covered in the warranty. Therefore, homeowners must choose only if they need a good financial cover and are okay with the restrictions.