If appliances or systems are older, it has become fairly standard, in residential real estate sales, for a Seller to provide a home warranty to a Buyer and this is a relatively inexpensive way of making a Buyer feel more comfortable in the purchase. If Sellers will not provide one, it is something a Buyer should consider purchasing on their own to avoid a big expense within the first year of the purchase.

A home warranty provides coverage for essential appliances and major home systems that break down due to normal wear and tear. The level of coverage varies from basic to comprehensive (with add-ons) and is the biggest factor in the cost.

The type of coverage can be for appliances, systems or both. You must read the fine print to make sure you’re getting the coverage you need. These are typically12 month contracts and have both a yearly fee and a service call fee.

Consumers should look at coverage limitations and exclusions. Pre-existing conditions are typically excluded. Certain parts for appliances or systems are excluded. There are dollar limits to each coverage.

Consumers should ask how repairs are covered. Do you pay the contractor and get reimbursed or does the company pay the contractor directly? Are you free to choose any contractor that you wish or is there a limitation? Consider the age of your appliances and systems and which ones you wish to have covered and the degree of coverage. Which are at risk of breaking down? Older appliances, expensive systems like the HVAC and items like water heaters that are needed to live comfortably are likely candidates for a home warranty.

You should compare the cost of the plan against the potential cost of the repair. A home warranty can easily pay for itself the first time you use it for a major repair. Additionally, they can provide convenience when a covered item breaks down if a call to the company will result in them finding a licensed contractor to send to your home.