Mortgage Lending Library
Home warranties, as the name suggests, are warranties on buildings and real estate. Usually, only new homes have home warranties. Home warranties vary widely. Many will cover the foundation and basic structure of a house. Some will cover additional things -- such as heating systems and plumbing systems -- while others will not. Wood work and paint are covered for a very short time, if at all. In general, the things that are covered by home warranties will be fixed or replaced free of charge if they fail under normal use during the warranty period. However, when looking at home warranties it is important to note that most come with guidelines for use. These outline the fair use expected of the homebuyer. If you inadvertently violate some of these conditions, your home warranties may be declared null and void. If home warranties are something that interests you when buying a new home, you need to start negotiating for home warranties early in the buying process -- before you have signed a contract and before you have even looked for new home loan. In most cases, if home warranties are available on the new construction, new developments, or a new building, the realtor or contractor will point these out right away, as home warranties can be an attractive feature for homebuyers. However, it is still the home buyer’s responsibility to bring up home warranties early in the negotiation process. Home warranties are often written in complex legal language. You may need a realtor or real estate lawyer to help to decipher the language. Professionals can explain all the terms to you, and since they have looked at many home warranties, they can also give you a sense of which items should be included in order to protect you the most. While home warranties are certainly not necessary -- many homebuyer successfully buy properties with no warranties at all -- they can give peace of mind to homebuyers buying new properties. If something goes wrong in the new property -- for example, if new windows are installed incorrectly, home warranties ensure that you do not have to pay for faulty construction out of your pocket. However, you do have to make sure that you are getting quality home warranties in order to get some protection.