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October 14, 2023

Updated: Oct 24, 2023

Purchasing a home warranty after the sale of a home can be a double-edged sword, offering both risks and rewards for homeowners. These warranties, often promoted as a safety net for unexpected repair costs, can provide peace of mind but come with caveats.


One of the primary rewards of buying a home warranty after the sale is financial security. Homeowners can safeguard themselves against unexpected and potentially expensive repairs to essential appliances and systems such as HVAC, plumbing, and electrical. In the event of a breakdown, the warranty provider covers the cost of repairs or replacements, reducing the financial burden on the homeowner. This can be especially beneficial for those on a tight budget or first-time homeowners, who might not have the savings to cover large repair bills.


However, the rewards of home warranties are accompanied by several risks. First and foremost is the cost. Home warranties come with upfront fees and service call fees for each claim, which can add up over time. In some cases, these fees may outweigh the actual cost of repairs, making the warranty less cost-effective.


Another risk is the fine print in warranty contracts. Many warranties have limitations, exclusions, and specific conditions that can be used to deny coverage. Homeowners might find themselves frustrated when they realize that certain components or issues are not covered, or that the warranty provider insists on using their preferred contractors, which may not always be the best option.


Moreover, there’s a risk of potential conflicts of interest. Some warranty companies maintain partnerships with service providers, which may lead to biased decisions in favor of repair over replacement, even when replacement would be more cost-effective.


Like any financial decision, it’s essential to do thorough research and consider individual circumstances before deciding whether a home warranty is the right choice.



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