ABOUT HOME WARRANTIES

Although written disclosure of known property defects by home sellers is not required by law in Florida, many REALTORS encourage sellers to fill out a Property Disclosure Statement. This disclosure itself does not guarantee that problems will not arise after the sale is closed.

If problems do arise after a sale is final, and there is no home warranty policy in place, the buyer may become frustrated and even feel that the seller and/or his or her real estate agent should be liable for any repair or replacement costs incurred.

Increasingly, sellers and real estate professionals are responding to these buyer concerns through the purchase of home warranties. Typically, these are one-year service contracts that cover the repair or replacement of major home systems and appliances that break down due to normal wear and tear.

While these policies are popular as selling tools in today's real estate market, just how much protection they can actually provide often depends on a number of factors consumers need to consider. Here are some tips on finding the right home warranty for your needs.

A home warranty may be purchased by a buyer or seller for a one-time premium that can range from $300 to $500. The policy generally covers major home systems, such as electrical, air conditioning, heating and plumbing. It also covers most built-in appliances. Under most policies, the only additional cost to the home owner is a service charge, to cover the cost of the repair visit.

A good home warranty policy provides buyers with protection from high repair costs, while it provides sellers with a sense of security that they will not be held liable if a system fails after the home is purchased. Home warranty policies also help obtain potentially faster sales.

But, do not take it for granted that a home warranty will cover small repairs and damages. They are not designed to replace broken glass or fix dripping faucets.

To be sure the home warranty you choose is right for your needs, be sure to understand exactly what the policy covers. The coverage provided is spelled out in the contract portion of the agreement and should be read carefully.

Before signing on the dotted line, consumers should consider the following aspects of the home warranty policy they have in mind:

• Check the financial status and service record of the home warranty company. Especially important--try to obtain recommendations from other consumers and real estate professionals who have worked with the firm.
• Make sure the policy covers the most common home systems.
• Understand that all warranty repairs are performed by contractors selected by the warranty company.

Consumers need to remember that home warranties are not a catch-all tool to cover problems existing prior to the time a warranty is placed on a home.

Since selecting a reputable home warranty company is crucial to ensuring good service, consumers should check with any member of the Daytona Beach Area Association of REALTORS for recommended names of home warranty companies.

While a home warranty has benefits, consumers should not consider it a replacement for a pre-sale home inspection, even if the warranty itself does not require a pre-inspection.