Looking to purchase a home in the near future? These days, it seems like everyone is on the move, and in this seller’s market, it might feel like the odds of getting a good deal are stacked against you. Still, there are things you can do to make sure the home you’re considering is worth the dollars you’re spending – such as hiring a real estate professional to help navigate the purchase and using a certified home inspector to rule out any major defects. The next best step? Looking into a home warranty to ensure that unforeseen repairs are covered.

But how do you know if a home warranty is necessary? Unlike homeowners insurance, a home warranty is not required in order to obtain a mortgage. Yet, for a seller, it can pad a deal on a home asking for top dollar and beyond. And for a buyer, it can be both a bargaining chip and peace of mind. While insurance most often covers damage from unexpected events caused by weather, fire, or vandalism, a home warranty is generally a 12-month contract with a company to provide repair or replacement services for appliances and systems within the home. Also, a warranty can alleviate the stress and hassle of finding qualified contractors to perform repairs, because these are often selected and scheduled by the home warranty company itself.

“It’s crucial to have a realtor who really backs you and truly understands the process – a realtor who can help you not only find the right house but also connect you with the right lender and inspector – and it’s especially helpful if they have a home warranty representative they work with,” recommends Tina Peterson, Team Leader of the Tina Peterson Team at Real Estate One in Howell. Peterson and her team are well known for excellence in the field and customer satisfaction, with their sales having placed them in the top half-percent of realtors nationwide. They have earned several awards and other accolades, including WDIV’s Vote4TheBest Detroit Realtors for four years in a row and Livingston County’s Best of the Best Realtor for the last five years. This perfectly qualifies them to give valuable advice to homebuyers. 

Peterson and her business partner, Kim Koss, say making a checklist of the appliances and utilities is useful. Are they old and likely in need of service soon? If so, buying a home warranty can save future headaches and repair expenses. Peterson and Koss have been very satisfied with the results their clients have received from home warranty purchases and recommend warranties as a rule of thumb.

“They’re especially helpful for first-time homebuyers and people with low or set incomes,” says Koss.

But be sure to do your homework and compare warranty companies. Read the fine print and ask other homeowners for recommendations, as not all warranty companies offer the same level of service. Often, a warranty can be included in the sale of the home, but if not, it can be purchased separately by the homebuyer, usually as a one-time payment for a time-limited contract. Koss suggests paying particular attention to the warranty agreement and which items will be considered additional and require a rider.

Jerry Bee, a homeowner in the quaint village of Stockbridge, had a bad experience with a repair he expected to be covered by his home warranty. According to Bee, the company claimed the particular issue that caused the furnace to fail was not a part of his contract, and the repair was not covered, although a bolt involved in the failure was covered. He appealed the decision to the company’s management but ultimately had to pay for the furnace repair.

Bee’s unfortunate experience has left him distrustful of warranty companies. Still, he would consider paying for a monthly appliance service plan through a utility provider, another affordable option providing appliance peace of mind.

Note from the Editor:

As some of you know, I purchased a home in 2020 and have shared stories of the many challenges I’ve encountered and projects I’ve taken on since doing so. I consider myself incredibly lucky to have bought a home warranty from America’s Preferred Home Warranty based in Jackson. Yes, there is a lot of fine print in the warranty. However, their customer service representatives have been easy to reach and extremely helpful. It’s easy to start a claim on their website, and, for me, the warranty has paid for itself more than three times over. Did they cover everything? No. Would I buy it again? Absolutely, and I did. I renewed for a second year because there are still a few things that haven’t broken yet ― not many, but a few. And if they do fail, I’ll be protected.