Q: “Do you recommend homebuyers invest in a home warranty? Why or why not?”
A: In 2020, I discovered that many home warranty plans offer a re-keying service, allowing the buyer to have the locks changed. Locksmiths can charge between $100 and $200 to rekey a house, nearly half of the typical $400 home warranty policy.
Since we believe that the re-keying service combined with the other provisions in the home warranty plan are so useful, my team now pays for the home warranty as a closing gift.
Typical homeowners policies cover the structure, but they may not cover appliances and components such as plumbing, ducting, electrical, hot water and heating systems. Home warranty policies are useful because they cover these items and they provide a low-cost way to avoid an unplanned expense, such as the replacement of a broken appliance.
The most common scenario involves either a dishwasher or a dryer that breaks down after the buyer moves in.
For the $75 cost of a diagnostic house call by a pre-screened technician, one can have the appliance either repaired or replaced.
A home warranty policy may not be needed on a fixer upper that will be extensively renovated with all new systems or a newly constructed home that already has the builder’s 10-year structural warranty, appliances with one-year manufacturer warranties and a fit-and-finish warranty from the builder.
John Solaegui, Compass, 415-999-0673, [email protected].
