Home Warranty Agreements
Buying a house can be filled with uncertainty because of the unknown quality of the construction. When you are concerned with the quality of the house, a home warranty could provide some peace of mind. A home warranty is a contract that guarantees certain components of your home in case they break down.
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Home Warranty Basics
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A home warranty is a contract that is sometimes included in the purchase of a new home. A home builder will provide a home warranty to ease any fears that a buyer might have about the quality of the new house. These contracts can also be purchased for existing homes to add an extra incentive for buyers. These warranties are sold by home warranty companies and can be purchased by the seller or the buyer in the transaction.
Service Contract
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A home warranty is essentially a type of service contract that guarantees certain components of the house. When something breaks down or is malfunctioning, you contact the home warranty company. At that point, the home warranty company will send a contractor in the area out to fix the problem. You will pay a deductible for each incident and beyond that, you have no other out-of-pocket costs. If something needs to be replaced, the home warranty company will pay for it.
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What Home Warranties Cover
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The items that can be covered by a home warranty contract are numerous. Depending on the type of warranty that you purchase, it could cover systems of the house such as the electrical components, the HVAC system, the plumbing and other similar parts of the house. Besides covering the basic structure of the house, it also can cover items within the house. For example, if the house came with appliances such as a refrigerator or range, these items can also be covered by the home warranty contract.
Issues
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Although a home warranty can be very attractive depending on your situation, there are a few known issues with some companies who provide them. When you have a home warranty, you have very little say over who comes to your house and fixes the broken item. The warranty company simply chooses someone from its database and sends him over. Another issue with home warranty companies is that they do not always cover what you think is covered in the contract. You might also be paying for protections that you will never need.
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