Prudential Fox & Roach Realtors Philadelphia realtors real estate homes for sale

Janis Peterson, GRI, Realtor®

Philadelphia Main Line Homes and Real Estate

Tel:  (610) 642-3744

Fax: (610) 658-0267


Subject: How to Evaluate a Home Warranty

Wouldn't it be nice to place a call and have a major appliance or mechanical system repaired for only a nominal fee? For homeowners covered by the ideal home warranty, or home protection plan, this is just how it works. Warranties protect buyers or sellers from problems that pop up either after closing on a property or during the marketing period. Homebuyers can purchase a one-year warranty to cover a single-family home or condominium. And policies are usually renewable. Seller warranties tend to have more limitations, and coverage is purchased by the day rather than annually. Sounds straightforward enough, but there can be a catch or two: Not every warranty provides the same protection and not all warranty companies are equal.

How can you evaluate a home protection plan? Comparison shop and pay close attention to coverage. For instance, some warranties may cover a hot water heater that functions on the day of closing, then seizes up six months later. But if that water heater was not in good working order when the home was purchased, and it breaks a couple of weeks later, it may not be covered by another policy.

Complicated? It can be. Even though the language in the warranty spells out what's covered, it isn't always the easiest document to understand. Thus, you may want to have your attorney decipher the contract. It may be worth the hour or so in legal fees.

The Council of Better Business Bureaus ( recommends contacting them for a reliability report on the warranty company under consideration. They also encourage warranty shoppers to call the company and inquire as to who performs repairs. Some companies use a network of contractors; others allow you to choose your own contractor to perform the work.

Along with these suggestions, make sure the warranty company is financially sound. In many states, warranty companies can do business without having the funds to back up their policies. Therefore, consider having your accountant investigate the company's financials.

Warranties can be critically important when it comes to new construction too. Obviously, the builder's reputation is an important consideration, because problems with new homes can be enormously expensive if not covered by a warranty.

Two types of defects-patent and latent-can affect new homes. Patent problems are visible to the eye, such as cracked plaster or a fence that's off-kilter. More expensive to correct than patent problems, latent defects develop later and may not become evident for some months. Ground shifting is an example. Consequently, the warranty for a new home can be one of the most important documents executed during the buying process.

Once you've purchased a warranty, document all incidents relating to an appliance or system breakdown and your dealings with the warranty company. No matter how winning the company may be, it's always smart to leave a paper trail.

So whether you're purchasing a new home or a resale, remember that warranties definitely have a place when it comes to protection and peace of mind in the real estate transaction.

"Real Service in Real Estate." For a personal consultation on buying or selling real estate, Janis Peterson, GRI, Realtor® can be reached at (610) 642-3744, e-mail: Prudential Fox & Roach Realtors® is an independently owned and operated member of The Prudential Real Estate Affiliates, Inc.

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