What is a Home Warranty?

By
Real Estate Agent with United Real Estate Dallas TREC# 0544069

What Is A Home Warranty?

Home Warranties, also called Residential Service Contracts, are warranties to cover the repair or replacement of specified major appliances, designated systems, and other repairs unique to the home warranty policy purchased by the homeowner.

Are Home Warranty Companies Licensed in Texas?

Home warranty companies operating  in the State of Texas are required to be licensed by the Texas Real Estate Commission (TREC).

How Do I Find A List Of Licensed Home Warranty Companies?

The TREC website lists home warranty companies licensed in the State of Texas.


What Is Covered By A Home Warranty?

Your purchased policy defines what is covered in your warranty.  Different levels of coverage are available.  In general,  purchased coverage is available for major home systems and some major home appliances.

Note: Each company specifies what is covered and how it is covered. Read the fine print.

Who Pays for a Home Warranty When you Buy a Home?

Texas real estate contracts address the opportunity to purchase a home warranty.  The Seller and Buyer decide if a warranty will be purchased,  which party will pay for the warranty, and  how much the party will pay for the warranty.    Consult with your Realtor about the cost of home warranty polices and do your own research on coverage and cost.

Who selects the home warranty company and the warranty plan, if the Seller pays for the warranty?

The Buyer chooses the home warranty company.  If the policy is more expensive than the amount specified in the contract, the Buyer may pay the cost over the amount agreed to in the contract.

How Do I Choose a Home Warranty Company?

I recommend beginning your search by printing the list of TREC Licensed Home Warranty companies. 

Talk with your Realtor about companies that have performed well for homeowners.  As Realtors, we receive feedback from clients.

Speak with friends who have a home warranty policies.

Read about the companies online.

Compile a list of your preferred companies based on your information gathering.

Further research the companies on your short list.  Beware of online reviews.  Some may be paid reviews.  Some sites allow vendors to remove negative reviews.  Check with the Better Business Bureau (BBB) and the Rip off Report.  Refine your list based on your research.

Read the warranty information for each company on your list.  Yes, read every word.  The policies are short and to the point.  Understand what is covered and what is not covered.  Note the levels of coverage and how they differ from each other.

Some companies have district representatives.  Give the company reps a call and ask questions.

Many home warranty disputes arise due to lack of information or understanding about policy coverage.  Make an informed decision!

How Do Home Warranties Work?

It is important to understand the home warranty process.

The homeowner calls the repair in to the home warranty company.

The company sends a work order to the appropriate repair company.  A day or two may be lost in this process.  The repair company calls you directly to schedule an appointment.

The homeowner pays the designated service fee to the service company. 

The technician assesses your issue. In some cases, the repair can be done the day the technician comes to your home.  In other cases, the technician must get an okay from the home warranty company to proceed with the repair(s).  If it is necessary to order parts, there may be a delay in the repair.

Check with your selected home warranty company to verify their process.

Are Home Warranties Worth the Money?

Sellers and Home Inspectors have no way of knowing that a major kitchen appliance,  hot water heater, air conditioning compressor, or pool pump is going to stop working in the months after you purchase your new home.   As the new homeowner, you are responsible for the repairs.  A home warranty may cover the repair and provide financial relief.

If a home warranty will put your mind at ease, do your homework and find the home warranty that meets your needs. 





Posted by

 Sharon Parisi,  Realtor®

Helping Dallas area buyers and sellers meet their real estate needs

214-450-3742

Sharon@sharonparisi.com

United Real Estate

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Rainmaker
3,252,842
Lou Ludwig
Ludwig & Associates - Boca Raton, FL
Designations Earned CRB, CRS, CIPS, GRI, SRES, TRC

Sharon

A home inspection is a important element of s successful transaction.

Good luck and success.

Lou Ludwig

Jul 31, 2015 12:14 PM #15
Rainmaker
1,267,934
Alan Kirkpatrick
Austin Texas Homes - Round Rock, TX
Alan in Austin

Sharon Parisi 

Good Morning, hope you have a wonderful day and enjoy the weekend. 

Aug 01, 2015 11:15 PM #16
Ambassador
2,147,269
Debb Janes EcoBroker and Bernie Stea JD
ViewHomes of Clark County - Nature As Neighbors - Camas, WA
REALTORS® in Clark County, WA

We had one on an older home in the past. Sorry to say our experience was not a good one. They didn't help us out much at all. However, with that said, it might have been the particular warranty we were given by the seller. I do know many buyers are happy when one is included. D 

Aug 02, 2015 01:55 AM #17
Rainmaker
1,075,862
Sharon Parisi
United Real Estate Dallas - Dallas, TX
Dallas Homes

Lou Ludwig Home inspections are essential to understanding the quality and condition of a property and weighing whether or not the purchase is a sound investment.

Aug 02, 2015 03:38 AM #18
Rainmaker
1,075,862
Sharon Parisi
United Real Estate Dallas - Dallas, TX
Dallas Homes

Alan Kirkpatrick The same to you.  I hope you can enjoy some quiet time today!

Aug 02, 2015 03:40 AM #19
Rainmaker
1,075,862
Sharon Parisi
United Real Estate Dallas - Dallas, TX
Dallas Homes

Debb Janes Many people are frustrated by their home warranties.  Warranties  can be a bonus, if new homeowners do not have to pay for the policy and they do their homework before selecting the warranty company.  Home warranties are definitely not a panacea for all home repairs.

Aug 02, 2015 03:50 AM #20
Ambassador
3,986,094
Debbie Reynolds, C21 Platinum Properties
Platinum Properties- (931)771-9070 - Clarksville, TN
The Dedicated Clarksville TN Realtor-(931)320-6730

I have some good companies I recommend. In the past I had warranty companies taht looked for ways to deny. I no longer uyse them.

Aug 02, 2015 09:46 AM #21
Rainmaker
1,075,862
Sharon Parisi
United Real Estate Dallas - Dallas, TX
Dallas Homes

Debbie Reynolds There are still companies that look for ways to deny claims.  It's definitely important to do your homework, if you're interested in a home warranty policy.

Aug 02, 2015 12:29 PM #22
Rainmaker
2,570,648
Rebecca Gaujot, Realtor®
Lewisburg, WV
Lewisburg WV, the go to agent for all real estate

I haven't had one buyer get a home warranty since doing real estate here in WV. A few times, seller has provided this with the sale.

Aug 02, 2015 04:20 PM #23
Rainmaker
1,075,862
Sharon Parisi
United Real Estate Dallas - Dallas, TX
Dallas Homes

Rebecca Gaujot, the GO TO REALTOR Home warranties are often paid for by Texas sellers. As always, it's important to read the fine print and talk with consumers about each company before selecting a policy.

Aug 03, 2015 12:42 AM #24
Rainmaker
1,434,894
Yolanda Cordova-Gilbert
Richmond, TX

Sharon,

Most new home builders have a 2 year warranty, the first year most everything except cosmetics and homeowners maitenance and I know of one home builder who makes you pay for your warranty no customer service there!

Aug 03, 2015 07:01 AM #25
Rainmaker
1,075,862
Sharon Parisi
United Real Estate Dallas - Dallas, TX
Dallas Homes

Yolanda Cordova-Gilbert Everyone needs to purchase homes from David Weekley!

Aug 03, 2015 08:31 AM #26
Rainmaker
3,507,450
Endre Barath, Jr.
Berkshire Hathaway HomeServices - Beverly Hills, CA
Realtor - Los Angeles Home Sales 310.486.1002

Sharon just stopped in to say hello hope all is well and you are busy , Endre

Aug 03, 2015 04:04 PM #27
Rainmaker
1,075,862
Sharon Parisi
United Real Estate Dallas - Dallas, TX
Dallas Homes

Endre Barath, Jr. life has been crazy.  This summer, the Dallas real estate market has been extremely busy.  That coupled with day to day life leaves little time for sleep!  I'm betting the same is true in LA. 

Aug 03, 2015 05:31 PM #28
Rainmaker
1,361,533
Nick T Pappas
Assoc. Broker/Broker ABR, CRS, SFR, e-Pro, @Homes Realty Group, @HomesBirmingham & Providence Property Mgmnt, LLC Hun... - Huntsville, AL
Madison & Huntsville Alabama Real Estate Resource

Sharon, great job on this post. It's so important that the new home owner understands they need to call the home warranty company first and not a contractor of their own....this has frustrated more than a few home owners who have made that costly mistake.

Aug 05, 2015 03:58 AM #29
Rainmaker
2,051,439
Robert Bob Gilbert
Berkshire Hathaway HomeServices Anderson Properties - Katy, TX
Your Katy TX ( West of Houston) Real Estate Expert

Sharon, Good post telling all about home waranties. My clients have experienced long delays with getting a technicians out to their  home and low maximum coverage amounts. A warranty is like an insurance policy but it will not cover everything or the post of replacement. 

Aug 05, 2015 05:34 AM #30
Rainmaker
2,433,224
Evelyn Johnston
Friends & Neighbors Real Estate - Elkhart, IN
The People You Know, Like and Trust!

Home Warranties are a great thing in my books.  I keep one on my home too.

Aug 05, 2015 11:09 AM #31
Rainmaker
1,075,862
Sharon Parisi
United Real Estate Dallas - Dallas, TX
Dallas Homes

Nick T Pappas I'm hoping that those looking for home warranty info will find this post and gain some insight into how warranties work.

Aug 05, 2015 12:10 PM #32
Rainmaker
1,075,862
Sharon Parisi
United Real Estate Dallas - Dallas, TX
Dallas Homes

Robert (Bob) Gilbert Some home warranties shine above others.  I have seen companies replace hot water heaters, disposals, washers, heat pumps, AC condensing units, pool pumps, etc.  I have also seen companies deny coverage.  It's important for owners to research companies, speak to local reps and understand the policy they purchase.  Home warranties are not for everyone.

Aug 05, 2015 12:21 PM #33
Rainmaker
1,075,862
Sharon Parisi
United Real Estate Dallas - Dallas, TX
Dallas Homes

Evelyn Johnston  I have seen many buyers renew their policies because they thought they were worthwhile. I bought  one for my own home so that I could better understand the product and explain it to first time buyers and homeowners.

Aug 05, 2015 12:25 PM #34
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Rainmaker
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Sharon Parisi

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