Lancaster PA Real Estate - What are Home Warranties and how they work.

Reblogger Everard Korthals
Services for Real Estate Pros with ---Preferred Lifestyle Advisors---
Original content by Claudette Millette

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During the real estate boom years it was fairly common for a home warranty program to be included with a home purchase.   Many brokers would use them as listing tools and also to provide an incentive for home buyers to feel more comfortable with their purchase.  Now, with home sales down and agents needing to cut costs, the inclusion of a home warranty as part of the sale has become less prevalent.

When counseling new home buyers, I encourage them to consider a home warranty plan as part of their purchasing strategy. 

What is a Home Warranty?

As with any type of insurance, a home warranty provides the buyer with some peace of mind.

Not to be confused with a builder's warranty, a home warranty is actually a service contract and is typically purchased for existing homes.  For an annual fee, which ranges from $400 - $600, a warranty will cover major mechanical systems and appliances such as furnaces, air conditioning, plumbing and electrical items.

Types of Coverage

Since companies differ, you will want to find out specifically what is covered.  There is usually a basic plan with upgrades available. 

A basic plan usually covers:

  • Heating systems
  • Water heaters
  • Plumbing systems
  • Garbage disposals
  • Dishwashers
  • Ovens
  • Ceiling fans
  • Ductwork

Upgraded plans are available to cover items like your refrigerator, central air conditioning, clothes washer/dryer and swimming pool.

How Do They Work?

When something breaks down, you call the warranty company and they will send out a local contractor to diagnose the problem.  You then pay the contractor a flat fee, typically $50 to $100 for the service call.  Then, the warranty company covers the cost of the repair or replacement of the covered item.

When Should You Buy a Plan?

It's best to purchase a home warranty during the actual real estate transaction.  Some companies do not offer plans after the purchase and the ones that are offered after the sale are usually inferior. 

Before buying you should check to make sure that the company is licensed in the state and confirm that the company is real.  An experienced buyer broker will be familiar with the various warranty companies and should be able to provide you with the guidance necessary to make the right decision.

 Related Posts:

Property Disclosure - Who Has the Burden of Proof?

Real Property vs. Personal Property - What is Included in a Home Purchase?

Assessing the Value of a Home

Courtesy, Claudette Millette, Broker,, 800-392-1446, E-mail 


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