How does a Home Warranty Work?
My clients usually ask me about home warranty. What is home warranty and what does it cover? Home warranty is basically an insurance policy that you purchase and they vary in price. In the Midwest, where we are from, it varies from $375 to $500 depending upon what you want covered. The nice thing about the home warranty is that if something breaks in your home during the period of home warranty you pay a small deductible ($50-$100), the warranty company will actually pay for all the additional repairs.
I often recommend home warranty for people who are little stressed while buying a property or people who are new to the buying process because it provides the peace of mind. You don’t have to worry about the roof leaking or the appliances breaking or the furnace or AC going off. The home warranty is peace of mind for you as a buyer to make sure that you are not going to have any unexpected expenses during your first year of ownership. Generally you can renew home warranties for subsequent years of ownership.