I don’t know why more rehabbers do not ask the Sellers to provide a Home Warranty. This costs the seller less than $350 and can save you a ton of money. Infact I would suggest getting the seller to agree to the sales price then tell them you will pay $350.00 more but they have to buy a Home Warranty (stipulated on TREC contract). Why? becuae if the seller provides the home warranty it is a.) In force immediately otherwise youhave to wait for 30 days before your 1st claim. b.) FULLY transferable during the term (if paid in full). Which means you can sell the property with a Home Warranty that your buyers can use.
How does a Home Warranty work? You/the Seller pay the years premmium @ closing then a $55 - $65 service fee when you have a problem. When you are buying houses that do not have electricty turned on this can save your $$$$ on HVAC problems. I bought a house that had elec. turned on when inspected but 2 weeks after close, during rehb, the compressor died. What could have been a $1700+ repair bill cost me only $55 + $200 for disposal. Savings $1200.00 including the price of the warranty.
Hopefully this tip can save you some money on your next rehab. Also great for landlords.
what all is covered by the home warranty? does something (furnace/waterheater/etc.) have to die completely, or will it cover things that are just not working correctly?
I had an issue on the last house I bought where the furnaces were hooked up incorrectly and needed a couple parts to function effectively, cost about 1,000. Would that type of thing be covered?
" Ihad an issue on the last house I bought where the furnaces were hooked up incorrectly and needed a couple parts to function effectively, cost about 1,000". Would that type of thing be covered?
Hi,
No that would not be covered, u have to be very careful with these home warranty people. I had a similar experience with my a/c unit, the wrong fuse was put in, i called them in & within a minute and a half the electrician sent by the home warrant service walked out with the $45 check with nothing done. Reason wrong ampage. Even though this happened to me twice, i still feel its worth getting the warranty, i just renewed it, just make sure to read the three pg fine print they send u before u call the service( they r very quick to respond), its pretty black n white. American Homeshield is great & if u r a R.E. agent then u get a pretty hefty disc. I hope i was able to answer yr Q.
Pkay.
I develop & sell land home packages. I have purchased many of these home warranties from various companies, I will purchase them no more. My exerience has been they never once paid a claim, when I asked the many repairmen who came @ claims for others-they laughed, said no they almost never pay.
I have had a few experiences with these warranties as a buyer, not investor. Quite honestly they have paid off big for me. I had so many claims on one house I owned that they dropped me. That was after the paid out over $3,000 in repairs. The policy cost the seller $375 and cost me maybe $250 in various fees. So my experiece was quite good. The warranty was thorugh AHS and they were actually pretty good to deal with, until they dropped me, lol!