HOUSTON HOME WARRANTIES :
What Are They and What Are The Benefits?
A Houston home warranty on a resale home is really just a service contract (a.k.a., Residential Service Contract or RSC) provided by a third party that will protect the home buyer from most ordinary breakdowns caused by normal wear-and-tear of appliances and systems, such as dishwashers and heating and cooling systems , typically for the first year of occupancy. The warranty may be offered by either the Seller, as part of the overall negotiations listed in the contract, or by the agent. Before you purchase any home (new or resale) you should have the home carefully inspected by a qualified professional licensed inspector, even if there is a home warranty service contract is in place. Typically, when a new home is purchased from a builder, the builder’s home warranty is much more comprehensive.
Below we’ll explain in more detail what a home warranty is and what it covers for both resale and newly constructed homes, and we’ll also further explain the benefits of a warranty for both buyers and sellers alike.
Warranties on Resale Homes
Once the home buyer has closed and can taken possession of the home, the buyer can move in with confidence knowing that a home warranty is in place and knowing that their appliances and the other major mechanical components of the home are covered. A basic service contract will pay for the repair or replacement of the dishwasher, range, oven, garage door opener, water heater, food waste disposal, electrical wiring, plumbing and HVAC systems.
Having a home warranty in place will give you peace of mind, knowing that the major components in your home are covered and will be repaired if necessary. Below are some of the major (RSP) Residential Service Providers:
First American Home Warranty
Allied Home Warranty
Buyers Protection Group
Fidelity National Home Warranty
Old Republic Home Protection
Home Warranty of America
American Home Shield
Landmark Home Warranty
at (866) 306-2999
There are numerous licensed providers of Houston home warranties to choose from. We encourage you to shop around and compare different warranty companies. Click to begin your research here.
If you are having trouble deciding which home warranty company to use, you may want to check out http://www.homewarrantyreviews.com/reviews. You may want to keep in mind that some of the companies are very large and most likely have complaints. However, the companies have millions of customers and when you provide service to that many people, some are sure to complain. Word for great service travels slowly…… word for poor service travels very quickly (like wild fire). Just another reason Team Sadler prides ourselves on providing our clients with the best service possible.
In Texas, the Texas Real Estate Commission regulates the service contract business, and regarding who pays for the home warranty – buyer or seller – that’s negotiable. However, almost without fail, sellers tend to set a maximum price point of what they’ll pay towards the warranty, and buyers are then free to shop for the one that best fits their coverage needs. If the cost of the warranty exceeds the amount to what the seller has agreed, the buyer can choose to pay the difference. Please see below an actual warranty excerpt from the TREC contract, and the fill-in-the-blank area is where the buyer and seller will come to terms and agree on the sellers allotted price for the warranty.
RESIDENTIAL SERVICE CONTRACTS: Buyer may purchase a residential service contract from a residential service company licensed by TREC. If Buyer purchases a residential service contract, Seller shall reimburse Buyer at closing for the cost of the residential service contract in an amount not exceeding $_______. Buyer should review any residential service contract for the scope of coverage, exclusions and limitations. The purchase of a residential service contract is optional. Similar coverage may be purchased from various companies authorized to do business in Texas.”
Some of the factors that help determine the price of a home warranty are the age of the home, whether or not it has a pool and whether you add additional specific items. Prices vary, but generally costs run from $400 to $800. Other factors that will increase the price of a warranty are adding additional items such as refrigerators, well pumps, septic tanks, swimming pool pumps, spas and free-standing appliances such as freezers, washing machines and dryers. Your home warranty is renewed annually, therefore, you can always add more items for coverage down the road.
New Construction Homes – Home Warranty
When it comes to newly constructed homes, it is common that builders provide their own warranties. New home contracts generally include one-year coverage for the builder’s workmanship and two years for repairs and replacement of failing components such as such as windows, heating, ventilation, doors and trim, air conditioning, electrical systems and plumbing.
More often than not, the builder will also offer 10-year coverage for “major structural defects”, for example, if a main beam in your living room is threatening to collapse seven years down the road. For peace of mind some buyers also purchase additional coverage from a third party after they review the basic warranty and discover that some home components are not covered by the builder’s warranty.
Buyers and Sellers – The Benefits of Home Warranties
The benefits of a home warranty are realized for buyers, when an unexpected break down happens in the home. If your AC Unit comes to a halt and no longer cools or your food waste disposal stops working, a quick call to your warranty provider will have the item repaired or a new one installed. Before arranging for any repairs, check with your home warranty provider just to be sure whether an item is covered or not.
Besides helping to take the worry out of purchasing a home with older systems and/or appliances, a home protection plan helps to protect against potentially high costs of repairing or replacing items in case of a breakdown. Unexpected repairs can be expensive for most families. A home protection plan can help guard against some of the unexpected costs of home ownership.
Benefits to Buyers:
- Relief from some of the expenses of unexpected breakdowns on covered items
- Affordable, flexible and customizable plans
- Access to a network of service contractors
- Increased confidence in your home purchase
Most likely you will only pay a small service fee as stipulated in your warranty agreement – instead of out-of-pocket, costly replacements – which you probably won’t appreciate right after buying a home.
- It may discourage downward price negotiation
- It can help distinguish your property from other listings
- It can help boost buyer confidence
- It can help reduce your liability in post-sale issues
For sellers, in the event something breaks down in the home post close a warranty protects you. If the warranty is in place, buyers refer directly to their provider to handle – and most importantly, to pay for – the issue. Some warranty companies also give sellers the option to purchase a home warranty when they list their home. Having this kind of warranty in place protects sellers when potential problems with a covered item are discovered during the home inspection. Your Team Sadler Realtor can help you decide which home warranty is right for you during the sale of your home.
Team Sadler Realtors encourages you to find the right home warranty coverage giving you peace of mind towards your new purchase. Ultimately, we want you to be happy in your new home and we would like to work with you to make sure that you are prepared for when the unexpected happens.