Our buyer requested a home warranty. Are these good? What do they cover?

[Anonymous]

When I was a first-time home-buyer of an older fixer-upper house, it was very important and ended up being worth the price (even though the seller bought the policy and I didn't). I had problems with the dishwasher, the washer and the hot water boiler. The d/w and washer turned out to be maintenance and adjustments, but the water boiler ended up being on its last legs. The warranty replaced the hot water boiler with one that would likely have cost me around $800. So worth it. And as a first time home-buyer, I didn't know much about the appliances.

I bought one for the house when I sold it and the buyers were again first-time home-buyers and appreciated the policy. I spoke to them at closing and they said that it was one of the selling points for them of my house vs another one down the street that was very similar and similarly priced (one of several plusses). A few months later, I had an item that was not forwarded and they called me to pick it up. I stopped by and they said that they had used the policy on one of the appliances and were grateful that I had gotten it.

When you are a new first-time home-buyer, you often don't have a set of repairmen and it's nice to have one number to call about various things that may break in your first home. It's a peace of mind policy and helps as a first-time home buyer gets used to handling home maintenance by themselves. If you have a starter home or a home that is good for first-time home buyers and younger buyers, then this is a good policy to have. If you have a home that is likely to be purchased by older buyers or buyers who are previous home owners moving up, it will be less of an added bonus.

[Anonymous]

If you have a pretty updated house, I think they are a huge waste of money. I would give the buyer $500 and a list of your favorite repair companies. Then she can decide whether she wants to use the money to buy a warranty or start a home maintenance fund. If your house really is pretty updated, I would be shocked if she went through the $500 during the year the warranty covered.

[Anonymous]

Anonymous wrote:If you have a pretty updated house, I think they are a huge waste of money. I would give the buyer $500 and a list of your favorite repair companies. Then she can decide whether she wants to use the money to buy a warranty or start a home maintenance fund. If your house really is pretty updated, I would be shocked if she went through the $500 during the year the warranty covered.

Nah, it's fine. She requested it, and for the price she's paying, 23% over asking, she can have what she wants up to and (almost) including my firstborn. If she asks for rose petals scattered in the bathtub I'm happy to start plucking!

[Anonymous]

Anonymous wrote:

Anonymous wrote:They're stupid but if she wants to be stupid and get one, fine. Imagine your HVAC stops working in August, it's covered by insurance so you want to get them to pay for it. They tell you XXX company can come out in 2 weeks. Um it's 1000 degrees in the house, you going to wait?

Plus it's $100 (I made that number up) for each service call. So your dishwasher needs a simple repair. You have 4 kids and run it daily. Are you going to wait for their preferred servicer to repair it?

All of this. Went 6 weeks without a washing machine while they tried to fix it and order cheap parts instead of replacing it.

[Anonymous]

It's good for the high ticket items like Hot Water heater or HVAC.

[Anonymous]

Anonymous wrote:I'm just curious. The cost is low (~$500) and she's offering us substantially above list, so I have no problem with paying for it, but I'm just curious. Is this actually a useful thing, or is it something that is suggested to soothe first time homeowners (which our buyer is)?

They are ok.

We let ours go after a few years when they came out a few times to fix the clothes dryer but it kept breaking. After I spent $325 with them I hired a real appliance repairman who figured out the real problem for $250-ish and who also told me the dryer hose/vent needed to be cleaned.

I think they are good for the first few years in case something major breaks unexpectedly and while the new homeowner builds their network of repair/maintenance people.

[Anonymous]

Our realtor gifted us one with our first home purchase. Our water heater promptly broke down and needed to be replaced, but it turned out to be such a hassle to use the warranty that we just paid for it ourselves. Not only was it difficult and time-consuming to use, but we would have had to choose from their list of providers, which was pretty lackluster.

[Anonymous]

Anonymous wrote:Thanks folks! Appreciate the perspectives. None of the appliances/systems are too old, but I hope the warranty is helpful to her and gives her peace of mind. I'm also leaving a list of good service providers who have worked on our house -- it's an old house and not everyone in the phone book knows how to deal with steam heat/plaster/etc!

Unfortunately, the warranty company will not be contracting with good service providers. They send out the cheapest bottom of the barrel people they can find.

[Anonymous]

Anonymous wrote:I've never had anything other than same day service on a home warranty claim. And it's only the $100 no matter how many people do call and how many times. The $100 is for the entire claim.

I had a hot water heater issue that they sent a same day plumber out but he said the issue is the electric going to the unit. The warranty company sent out an electrician, again, same day, all covered by the same $100 fee.

This.
Don't listen to anyone who says that they're not worth it.
They have saved me a lot of money on a complete HVAC replacement, water heater, dryer, food disposal and range so far. Mine is $75 service fee.

[Anonymous]

Anonymous wrote:

Anonymous wrote:If you have a pretty updated house, I think they are a huge waste of money. I would give the buyer $500 and a list of your favorite repair companies. Then she can decide whether she wants to use the money to buy a warranty or start a home maintenance fund. If your house really is pretty updated, I would be shocked if she went through the $500 during the year the warranty covered.

Nah, it's fine. She requested it, and for the price she's paying, 23% over asking, she can have what she wants up to and (almost) including my firstborn. If she asks for rose petals scattered in the bathtub I'm happy to start plucking!

Whether it will be worth it or not is unknowable. Like any insurance-type product, some people get their money's worth, but most don't (other than peace of mind).

The really dumb thing about this is that you already have a buyer, who is paying significantly over list, and you have basically decided to give her $500. Why? Because she's paying over list? That's the most fuzzy-headed reason I've ever heard. You entered into a business transaction with this person, and after the deal is done, she asked to renegotiate the terms of the contract for a $500 rebate. I assume that after your plumber comes buy, quotes you a price you agree on, does the work, and then requests an extra $50 just because, you give it to him too?

Your answer should be that if she wants a home warranty, she's more than welcome to purchase one.

[Anonymous]

Anonymous wrote:

Anonymous wrote:I've never had anything other than same day service on a home warranty claim. And it's only the $100 no matter how many people do call and how many times. The $100 is for the entire claim.

I had a hot water heater issue that they sent a same day plumber out but he said the issue is the electric going to the unit. The warranty company sent out an electrician, again, same day, all covered by the same $100 fee.

This.
Don't listen to anyone who says that they're not worth it.
They have saved me a lot of money on a complete HVAC replacement, water heater, dryer, food disposal and range so far. Mine is $75 service fee.

The response of someone with a really bad understanding of math and statistics.

[Anonymous]

Anonymous wrote:

Anonymous wrote:I've never had anything other than same day service on a home warranty claim. And it's only the $100 no matter how many people do call and how many times. The $100 is for the entire claim.

I had a hot water heater issue that they sent a same day plumber out but he said the issue is the electric going to the unit. The warranty company sent out an electrician, again, same day, all covered by the same $100 fee.

This.
Don't listen to anyone who says that they're not worth it.
They have saved me a lot of money on a complete HVAC replacement, water heater, dryer, food disposal and range so far. Mine is $75 service fee.

I could go a week without a range and a few weeks with no food disposal. I'd die in winter or summer if I had to wait more than a week for no HVAC. I couldn't wait more than 2 days for a broken water heater to get fixed.

[Anonymous]

worthless. The warranty company hires handymen with 2.0 ratings who keep patching things up in order to keep charging the $75 fee.

[Anonymous]

Bought my house in June 2020 with an Old Republic warranty.

HVAC went out in September 2020.

I paid out of pocket $1279 for parts not covered by warranty. Saved me about $8000.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:If you have a pretty updated house, I think they are a huge waste of money. I would give the buyer $500 and a list of your favorite repair companies. Then she can decide whether she wants to use the money to buy a warranty or start a home maintenance fund. If your house really is pretty updated, I would be shocked if she went through the $500 during the year the warranty covered.

Nah, it's fine. She requested it, and for the price she's paying, 23% over asking, she can have what she wants up to and (almost) including my firstborn. If she asks for rose petals scattered in the bathtub I'm happy to start plucking!

Whether it will be worth it or not is unknowable. Like any insurance-type product, some people get their money's worth, but most don't (other than peace of mind).

The really dumb thing about this is that you already have a buyer, who is paying significantly over list, and you have basically decided to give her $500. Why? Because she's paying over list? That's the most fuzzy-headed reason I've ever heard. You entered into a business transaction with this person, and after the deal is done, she asked to renegotiate the terms of the contract for a $500 rebate. I assume that after your plumber comes buy, quotes you a price you agree on, does the work, and then requests an extra $50 just because, you give it to him too?

Your answer should be that if she wants a home warranty, she's more than welcome to purchase one.

What on earth are you going on about? I’m the OP. The home warranty request was part of the offer. When we laid out the offers, we deducted $500 from hers to cover the requested warranty. I asked about it here because I was curious why someone who wanted a house badly enough to offer so much over list would then ask for something little like that. Honestly, I think the realtor probably put it in to reassure her since it is an older house and she is a first time buyer.

But thanks for the condescending lecture!