To Have A Home Warranty Or Not? The Debate
Realtor and Investor · Scottsdale, AZ · Member since 2017 · 1k+ posts · 1k+ votes
To Have A Home Warranty Or Not? The Debate
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Architect · Papillion, NE · Member since 2015 · 1k+ posts · 840 votes
8yI had one the first year on the house bought and lived and then turned it into a rental. Due to it being an older house they excluded everything under the sun so it was worthless. I wont get another one or recommend them. I have heard people have good luck with them but not me.
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- Pittsburgh, PA · Member since 2016 · 140 posts · 119 votes8yI have the same question so I’m going to follow this discussion. I remodeled a house from the ground up about 5 years ago, and with everything being brand new at the time, I didn’t think it was necessary. I never liked the idea of a warranty for my personal residence because I’ve heard (never had experience with one) that you’re pretty limited in replacement options and I just feel like I’d rather save the money I’d expand on a warranty and then if/when the time comes I have hopefully saved enough to replace whatever broke with exactly what I want. For rentals, I’ll probably invest in one though because I’m not as concerned with options for replacement as I am with minimal expenses. That’s my take right now, having no personal experience with one. I’m interested to see what other people think.
- Architect · Papillion, NE · Member since 2015 · 1k+ posts · 840 votes8y
I had one the first year on the house bought and lived and then turned it into a rental. Due to it being an older house they excluded everything under the sun so it was worthless. I wont get another one or recommend them. I have heard people have good luck with them but not me.
- Realtor and Investor · Scottsdale, AZ · Member since 2017 · 1k+ posts · 1k+ votes8y
Originally posted by @Jim Adrian:
I had one the first year on the house bought and lived and then turned it into a rental. Due to it being an older house they excluded everything under the sun so it was worthless. I wont get another one or recommend them. I have heard people have good luck with them but not me.
So, your experience is that if the property is older, the home warranty company is less likely to cover items? Did they disclose items being excluded from the beginning, or did you find this out as you went to make claims? I am interested to know at what point they started excluding items.
- Realtor and Investor · Scottsdale, AZ · Member since 2017 · 1k+ posts · 1k+ votes8y
Originally posted by @Megan Hirlehey:
I have the same question so I’m going to follow this discussion. I remodeled a house from the ground up about 5 years ago, and with everything being brand new at the time, I didn’t think it was necessary. I never liked the idea of a warranty for my personal residence because I’ve heard (never had experience with one) that you’re pretty limited in replacement options and I just feel like I’d rather save the money I’d expand on a warranty and then if/when the time comes I have hopefully saved enough to replace whatever broke with exactly what I want. For rentals, I’ll probably invest in one though because I’m not as concerned with options for replacement as I am with minimal expenses. That’s my take right now, having no personal experience with one. I’m interested to see what other people think.
Which home warranty company were you considering? Many of them will do a cash settlement with you if disagree with their course of repair, or if you want to upgrade the item being replaced. Did your home warranty not allow for that?
- China, ME · Member since 2014 · 3k+ posts · 4k+ votes8y
@Cara Lonsdale When representing both buyers and seller, I've used Home Warranty of America. Their middle plan costs about $500 and covers quite a bit. www.HWAHomeWarranty.com
I recently had a buyer who was just barely able to afford the home she was buying for her husband, two adult daughters and 5 grand kids. Even an appliance failure would have been a genuine hardship.
I negotiated for the seller to get her that warranty and sure enough, her dishwasher croaked within a few weeks.
I also offered one when selling my own home last year.
FULL DISCLOSURE - I have no relationship with HWA except recommending them to clients and as a customer. I receive no referral fees or any other benefits from them.
I had one on my rental, I don't think I ever used it. Then my sewer lateral needed to be replaced, the warranty company offered to cover materials IF I used their company. I was able to get a different quote for about 1/3 of the price... so I passed on the generous offer.
Now, as a renter I have one and it's been absolute terrible. Like to the point I'm ready to dedicate my life to spreading the word how bad it is.... But the short version is they'll charge 75 dollars per service call. Sometimes that's worth it, but almost every single time they come and do an inspection. Then week later part arrives they come back out, then about another week if anything else is needed. Basically every time they come out it's at least a week. If the item is older or unique they'll likely switch vendors... and that starts the 1 week at a time process all over again.
But the worse case so far... 2 months to repair a dryer and they still can't get it right. Not that the repair was hard, they can't remove a stacked dryer. Multiple companies, constantly switching vendors, they can't get it done and now the land lord is replacing it.
In short probably not worth the headache and you're probably better off saving that money for future repair.- Architect · Papillion, NE · Member since 2015 · 1k+ posts · 840 votes8y
Originally posted by @Cara Lonsdale:
Originally posted by @Jim Adrian:
I had one the first year on the house bought and lived and then turned it into a rental. Due to it being an older house they excluded everything under the sun so it was worthless. I wont get another one or recommend them. I have heard people have good luck with them but not me.
So, your experience is that if the property is older, the home warranty company is less likely to cover items? Did they disclose items being excluded from the beginning, or did you find this out as you went to make claims? I am interested to know at what point they started excluding items.
They excluded from the beginning. Didn't like galvanized water pipes, the hvac unit, some plumbing traps, aluminum wire, roof (asbestos tiles). Warranties have so many exclusions they are typically not worth the paper they are written on. Most things I can fix myself anyways.
- Realtor and Investor · Scottsdale, AZ · Member since 2017 · 1k+ posts · 1k+ votes8y
What about warranties for specific items like appliances, or outside water mains? In AZ, APS (our electric company) sends out mailers offering warranties from vetted companies for coverage on specific items. We have received one for the HVAC, and a separate one for the water main from the street to the property. Has anyone used one of these types of warranties, and what was your experience?
- 8yMindy JensenPro MemberBiggerPockets Money Podcast Host · Longmont, CO · Member since 2014 · 7k+ posts · 10k+ votes
@Cara Lonsdale, I wholeheartedly agree with @Jim Adrian . I don't think they're worth the paper they're printed on. Whatever breaks either isn't covered, or is covered but only if you use their contractor. The contractor charges you $80 just to come out and look at the issue.
My experience is that the contractors the warranty company uses are the bottom of the barrel, you'd-never-think-of-hiring-them-if-it-wasn't-the-only-option-available kind of guys.
Save your $500.
I also don't buy extended coverage on anything, either. Not worth it.
- Realtor and Investor · Scottsdale, AZ · Member since 2017 · 1k+ posts · 1k+ votes8y
Originally posted by @Mindy Jensen:
@Cara Lonsdale, I wholeheartedly agree with @Jim Adrian . I don't think they're worth the paper they're printed on. Whatever breaks either isn't covered, or is covered but only if you use their contractor. The contractor charges you $80 just to come out and look at the issue.
My experience is that the contractors the warranty company uses are the bottom of the barrel, you'd-never-think-of-hiring-them-if-it-wasn't-the-only-option-available kind of guys.
Save your $500.
I also don't buy extended coverage on anything, either. Not worth it.
Interesting that you mention extended warranties. I bought an extended warranty through Best Buyer once for a freezer. I think it cost me $50 extra. A little over a year after my purchase, the freezer completely stopped working. I called Best Buy, and they had someone come pick it up, and sent us a check for the entire cost of the purchase AND the value of the food that was inside the freezer that went bad as a result. So, to me, that was well worth the $50. So, it sounds like there are different experiences out there. I guess it really is like homeowner's insurance. You don't get it to rely on it for rehabbing your property, but it serves as a huge help when unexpected items go out.
I understand the trade call fees, and the contractor choices. However, if the HVAC goes out, and I don't have $7K to replace it, but the Tenant needs to have AC (I live in AZ afterall), I have to have that repaired ASAP. And $65 for a trade call fee, even with a lesser, but comparable system, is worth it. So, having the warranty in place just makes sense.
Best Buy (and similar) warranty are different.... and can be good value. If I remember right they're based off purchase price and you can use that as a replacement. They are great for high end electronics where prices drop quickly.
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