Are Home Warranties Right for You?
Your income tax is probably filed for last year by now and you've been through your expenses for the year. Money spent on repairs to your home is not deductible but being aware of how much you spent last year may help you make a decision that could save you money this year.
Sellers, often, provide a home warranty to buyers to give them peace of mind by limiting some of the out-of-pocket money spent on unexpected repairs for one year. Home warranties can be renewed by the buyer by paying the annual fee and any homeowner can purchase one for their home whether they had one when they bought it or not.
A home service contract typically covers mechanical systems and built-in appliances in the home. Many times, these items are not covered by the homeowner's insurance policy. They can also include other things such as pool and spa equipment, and free-standing appliances like refrigerators, washers and dryers.
The process is simple. It doesn't cover pre-existing conditions. Once a plan is in effect, you call to report a claim. The company will assign a local profession to assess the problem and if covered, they will repair or replace the item. You will only pay a service fee.
Home protection plans can range in prices depending on area and coverages. Most start around $400-500 a year which could easily cover the cost for one claim alone. But keep in mind, the warranty contract does not seek out to replace something that you is older. The contract states they must keep the item up and running during the contract period. Even if the item such as an HVAC or water heater may be well past it's life, they will choose to repair than replace. If the item can not be fixed, replacement usually occurs.
For more information on home warranties in general, you can go to HomeServiceContract.org which is an association representing some of the premier home service contract providers. If you'd like to have a recommendation based on companies we work with in our area, give me a call at (859) 509-8008.
Lexington Ky is always #1 in my book! Whether you want to buy a downtown condo, a custom walkout ranch on a golf course, or a horse farm in the country, I can help find the perfect home for you – as well as help you sell your home. In addition to Lexington Real Estate, I specialize in the nearby towns of Paris, Midway, Georgetown, Winchester, Nicholasville and Versailles.