When buying a home in the Bay Area, a home warranty can be an important part of your purchase process. It’s crucial to understand how it differs from homeowners insurance and how it can benefit you.
A home warranty is a service contract that helps cover the cost of repairs and replacements for essential home systems and appliances. Unlike homeowners insurance, which covers risks like fires and theft, a home warranty focuses on maintaining and repairing items like:
- Major appliances (e.g., dishwasher, oven)
- Home systems (e.g., electrical, plumbing)
However, it generally does not cover:
- Roof issues
- Water damage from roofing problems
- Exterior items like fences or landscaping
- Items in detached garages
Who Pays for It?
In many cases, I include a home warranty in the offer, and most sellers will agree to cover the cost as part of the sale negotiations. If the seller doesn’t include it, you can purchase one yourself.
Cost
Home warranties typically range from $600 to $1200 per year. Additionally, there’s usually a service fee of about $85 per visit for repairs.
What If an Appliance Needs Replacing?
If an appliance or system can’t be repaired, the warranty company will replace it with a model that has similar features, though it may not be the same brand. Some companies offer a cash payout if you prefer to purchase your own replacement.
Additional Benefits
Many home warranties also include a re-key service. This allows you to replace the locks on your new home for free before you move in, adding an extra layer of security and convenience.
How to Purchase?
If the seller doesn’t include a home warranty, you can purchase one from reputable companies like Old Republic Home Protection, American Home Warranty, or Fidelity Home Warranty. It’s best to get quotes online and arrange for the warranty to start on the closing date.
In Summary
A home warranty is a valuable tool in managing repair costs and reducing stress when buying a home. In the Bay Area’s competitive market, having a warranty can provide peace of mind and added benefits like re-key services, helping you settle into your new home with confidence.
