A Caution About Home Warranties...

Many times during real estate transactions, a home warranty is included as part of the package as an added benefit to the buyer. It is often viewed as reassurance to the new buyer that "everything will be covered" should something go wrong.

The new owner feels secure believing that once the home warranty fee is paid for, he or she will not have to pay out large sums of money in repairs - "that all the repairs will be covered by the home warranty." This simply is not true. But it is a common misconception that you should be aware of.

Home warranties can be beneficial in many ways. However, there are many limitations and exclusions to their coverage.

Pre-existing defects - this term refers to a condition that exits prior to the home warranty coverage period. In other words, if an item breaks down, and it is determined that the item had a concealed defect, or started to malfunction before the home warranty was purchased, the home warranty will not cover that item.

What can you do to protect yourself?

Research. It is strongly urged that you thoroughly research the home warranty that you want to purchase. Ask specific questions about covered items, limitations, and exclusions. If you are purchasing the home warranty to cover certain items, make sure that those items will actually be covered.

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