Do You Need a Home Warranty for Your Philly Home?

Even with a full inspection and seller’s disclosure, new home buyers can’t foresee every potential problem with their new home. One solution to provide buyers more comfort is a home warranty, which is a service plan covering home appliances and systems.

Even with a full inspection and seller’s disclosure, home buyers can’t foresee every potential problem with their new home. One solution to provide buyers more comfort is a home warranty. This warranty is similar to a service plan covering appliances and home systems such as heating, cooling, electrical, and plumbing. In the event of an appliance malfunction or a heating system breakdown, the warranty company would repair or replace the item, up to a certain dollar limit. Often, sellers will buy or offer to transfer an existing warranty in conjunction with a home sale as one way to encourage buyers.

How Much Do You Know About Your New Home?

Home warranties provide extra incentive for properties offered in “as-is” condition, as with a short sale or foreclosure. Often, distressed houses have not been properly maintained for some period of time. In cases of foreclosure, banks do not typically provide any type of seller’s disclosure. If utility power has ceased, getting the bank to agree to turning on electricity and water for inspections can be difficult, and buyers are left guessing as to the state of the plumbing and heating systems. In these cases, a home warranty might make sense for a new buyer.

Consider the Age of the Home and the Existing Warranties

Part of Philadelphia’s unique charm is attributed to its many beautiful old homes, like those in Elfreth’s Alley, the country’s first residential neighborhood. Older homes tend to experience more systemic problems simply due to the age of plumbing and heating systems, items that can be covered under a home warranty. Newer homes with new appliances may still be covered under builders’ or manufacturer’s warranties, yet sometimes these warranties do not transfer to second owners. When making a decision about purchasing a home warranty, consider your likelihood of actually using it for a repair or replacement, taking into account existing warranties covering the property’s appliances or HVAC systems.

How the Reimbursement Process Works

According to Angie’s List, companies offering home warranties are their “most complained about” category of business. The major source of dissatisfaction relates to the service fees charged when an item needs to be repaired or replaced. Also consumers are often disappointed by the many exceptions to coverage. If you’re considering a home warranty, it’s a good idea to read over the policy carefully and note all dollar limitations and exclusions. With most home warranties, the homeowner pays a service fee starting around $75 for each repair visit. Many times, the warranty company will attempt to repair an item before agreeing to replace it. In these cases, you will not be able to choose the contractor who comes to repair the item.

If you’re considering a home warranty purchase for your Philadelphia home, check with the Pennsylvania Home Service Contract Association for a list of in-state providers. You can also purchase a warranty through your real estate agent.

Jennifer DiGiovanni is a freelance writer and a partner in a real estate investment firm focusing on residential properties. She previously worked in the financial services industry and has earned an MBA from Villanova University. Jennifer enjoys writing about real estate, home improvement and small business.