Should Real Estate Agents Recommend A Home Warranty?

When someone makes the decision to buy a home, the first thing that most will do is have a heart-to-heart talk with their real estate agent.

Once the client has settled on a specific property, condition of the property is often one of the determining factors considered by the client prior to making an actual offer.  

Most agents have a working knowledge of the structural elements of construction, and most can even speak to the cost of plumbing, HVAC and most cosmetic repairs or changes.

But few real estate agents seem to be knowledgeable on house appliance issues. 

To master the trade, it is important to gain a working knowledge of the issues that surround the major appliances that are often included in a residential real estate transaction.  

As a shortcut to gaining this kind of knowledge, many real estate agents have begun to recommend the purchase of a home warranty to their clients.

What is Covered?

A good home warranty covers the major mechanical systems of a home if: 

1. They become broken or inoperable due to normal wear and tear.

2. They are on site and in proper working order at the start of the warranty.

3. They are located inside of the foundation of the home or detached garage

A home warranty generally covers:

• Attic Fan

• Bathroom Exhaust Fan

• Ceiling Fan

• Central AC System

• Central Heating System

• Clothes Dryer

• Clothes Washer

• Dishwasher

• Doorbell

• Ductwork

• Electrical System

• Garage Door Openers

• Garbage Disposal

• Hot Water Heater

• Instant Hot Water Dispensers

• Jetted Bathtub

• Kitchen Fan/Exhaust Hood

• Microwave Oven

• Oven, Range, Stove, and Cooktop

• Plumbing Including Stoppages

• Refrigerator with Ice Maker

• Stand-Alone Freezer

What is NOT covered

Covered items are generally protected against malfunctions of components that are necessary for operation, most home warranties exclude things like cosmetic defects, pre-existing conditions, rust or corrosion, etc.

Additionally, most home warranties have maximum liability limits both for the life of the contract, and for specific systems.

Additional mechanical systems may be included for additional cost, including:

• Additional central AC unit

• Additional central heating unit

• Additional dishwasher

• Additional hot water heater

• Additional microwave

• Additional washer/dryer

• Central vacuum

• Extra oven

• Ice maker

• Lawn sprinkler system

• Limited roof leak

• Pool and spa

• Secondary refrigerator

• Septic system

• Sump pump

• Water softener

• Well pump

• Whole-House humidifier

• Wine refrigerator

The devil is often in the details, and it makes sense to shift the burden of due diligence back to the home buyer, so there is never an issue of an agents words being misconstrued as a promise of coverage.

Conclusion

Home warranties are offered by many reputable, and some NOT so reputable companies.  Do your research before recommending a specific policy, or better yet, encourage the client to do their own research and read a review of Amazon Home Warranty along with any others that are offered in your specific area.