When selling your home, you might be tempted to invest in a home warranty for protection against malfunctions or other associated costs. Some believe that a home warranty also increases the price of real estate in Las Vegas, but that is just a myth; especially when talking about luxury real estate.
There are arguments for and against house warranties and in this article, we will explain some of the things that home warranty providers don’t want consumers to know. This will help you decide on whether you should invest in a home warranty or not.
Who Should Pay for a Home Warranty?
There is no hard and fast rule about who is going to pay for home warranty. The seller or buyer can pay, depending on the agreement. Keep in mind that as a buyer, you aren’t obligated to pay for the same. Just remember to convey your intentions to the seller(s).
Some real estate agents also offer home warranty to buyers as a gift, but we recommend you not hedge your bets. The larger your home, the more home warranty will cost.
There Is No One-Size-Fits-All Policy
There are different types of home warranties that you can invest in and the cost will vary accordingly, too. Some home warranty types include, but aren’t limited to:
- Home appliances
- HVAC warranty
- Plumbing system (gas and water) warranty
- Construction warranty
- Electrical system warranty
Home appliances and systems are typically covered; but only the basic ones. For custom systems, you will have to read the fine print or ask your real estate agent. Luxury real estate in Las Vegas usually has custom systems installed, so make sure you ask about them.
Home Warranty & Home Insurance Are Two Very Different Things
This is a mistake that many buyers make. Remember:
- Homeowners insurance will cover any damage done by a NATURAL DISASTER such as a hurricane, earthquake, fallen tree, etc.
- Home warranty covers damages and the maintenance your home will need because of normal wear and tear.
Abnormal Loss Isn’t Covered
Home warranty requires that you install and are using the appliance or system properly. They don’t inspect it, but that doesn’t mean that their investigative team won’t find out that the fault was because of user error.
If the appliance gets damaged because of user error or poor maintenance, you may not be entitled to reimbursement.
Service Fee – The Biggest Hitch Road
You (or the seller) will be paying the warranty company for your plan regularly but that doesn’t mean you won’t have to pay a dime anymore. You will have to pay a service fee whenever you call a professional over. This is known as a trade service fee. However, if a repair will need more than one visit, you’ll have to pay just once.
In 2020, this fee is somewhere between $60-$120 in Nevada, depending on the plan size.
Disclaimer: There are numerous factors to consider in every investment, including real estate. The information provided above is just a matter of opinion and can change with time. It shouldn’t be construed as legal or tax advice; neither does the report constitute a financial promotion or investment advice. It is general information and before making any such decision, you should seek out licensed professionals and see all ends clearly.
