Can I Buy a Home Warranty Prior to Prior to Purchase/Inspection?

7 Replies

Hi All:

Question for the veterans...

I'm looking to purchase a property from a wholesaler to rehab and resell. I'm obviously buying "AS IS" but wanted to know if there's a way I can purchase a home warranty for the property prior to my inspection in case we find out that there are problems with house/HVAC.  

I am basically trying to get coverage for the HVAC system, as I know the condenser is shot. I heard recently that Old Republic (home warranty company) recently changed their policy that if the condenser needs to be replaced, they'll also replace the matching handler at no additional fee.

Any insight on the topic is much appreciated!

Thanks,

Jon

It's my understanding that the home warranty would only cover items currently in working order, and there is usually a time period, like within first 30 days, where not covered, anyway.  So a home inspection or disclosure from seller that hvac is shot would probably mean no coverage for it under the warranty, anyway.  I am selling an out of town property and purchased a home warranty to cover everything while it's for sale, then transfer to buyer at close, but the property manager inspected everything when tenant moved out to insure it's all in working order, so they told me it would all be covered after 30 days.      

Promotion
Guaranteed Rate
Guaranteed Rate is a top mortgage lender
Save $1,290 on your next home – no lender fee*
Get special perks like $1,290 in lender fee savings when you buy a second home with Guaranteed Rate.
Apply Now

Do you think an auto insurance company will give you insurance *after* you total your car?

Same answer.

I figured as much, but one could hope... I didn't know if there was any way to go about protecting myself on the buy as the seller listed the condenser as, "seeming to be newer."  After walking the property with my contractor, it's obviously not newer, and it's definitely not functioning properly.  

I plan on negotiating the sale price (even further) based on the bad unit, but didn't know if there was any other tips regarding warranties, etc.  Anyone have a company they recommend that has treated them well in the past? I plan on purchasing a home warranty prior to me selling the property, and transferring it to new owner.

I'm looking at Old Republic and AHS.

Originally posted by @Jonathan Drago :

I figured as much, but one could hope... I didn't know if there was any way to go about protecting myself on the buy as the seller listed the condenser as, "seeming to be newer."  After walking the property with my contractor, it's obviously not newer, and it's definitely not functioning properly.  

I plan on negotiating the sale price (even further) based on the bad unit, but didn't know if there was any other tips regarding warranties, etc.  Anyone have a company they recommend that has treated them well in the past? I plan on purchasing a home warranty prior to me selling the property, and transferring it to new owner.

I'm looking at Old Republic and AHS.

 The best way to protect yourself is to do a thorough inspection.  Don't rely on what the seller tells you...

All of the warranty companies will require proof of a home inspection showing the items like HVAC are in basic working condition for them to allow a claim immediately after closing. Some warranty companies will allow claims for undetected pre-existing conditions, but you would still have to have an inspection report showing the HVAC appeared to be in basic working order by the inspector. The keyword is "undetectable," so not testing out the system to identify an obvious issue would result in a denied claim. 

You can however attempt to repair the system to working condition, then order a warranty at closing, which will cover any issues that arise immediately after closing. AHS home warranty would work and has coverage for undetected pre-existing conditions and lack of maintenance, which would minimize chance of denial by warranty company. Or you could let buyer pick out company and offer credit at closing to pay for warranty.

https://www.ahs.com/realestate/home_warranty/home-...

I usually would do minimal repairs for a rental, but I would expect a higher caliber of repair or replacement if you are flipping this to the end user. Just my thoughts..