Every homeowner has probably been in the moment of contemplation and reasoning. Wondering if a home warranty was worth the expense? Even new home buyers will be faced with the same decision after their first-year warranty expires. Unfortunately, there is not a clear yes or no answer one-hundred percent of the time. There is some that claim that under no condition are home warranties worth the money.
From our own experience, we have not found that to be the case. We have managed and owned multiple residential properties over the last twelve years. Sometimes we had a home warranty and sometimes we didn’t. We are going to talk about three properties in particular. Each of these properties was unique, with a variety of differences. Before we dive into our story, let’s talk about things that need to be considered before purchasing a home warranty.
- Do you have enough money in savings to cover multiple large repairs in a calendar year?
- Is the age of your AC / heating units over 15 years of age?
- Do you have three or more appliances over 15 years of age?
- Was your home built prior to mid-1970s with original plumbing and wiring?
If you answered, yes, to any of the above items then you need to consider a home warranty.
The first property we owned was built in the early 1980s. The previous and original owner had the home constructed and maintained with quality and longevity in mind. The most prominent feature of the property was a custom pool that was approximately ten years old and in good working condition. The AC and heating units were approximately twenty plus years old.
What to do? Because of the quality of care provided by the previous owners, we elected NOT to do a home warranty. After five years of owning that property, that decision ended up being the best decision. Because of the age of the heating and cooling units, we agreed to a rigorous bi-annual maintenance program to prevent breakdowns and prolong the life of the units. They never missed a beat. Our greatest expenses with that property ended up being; you guessed it, the pool. Most home warranty’s pool coverage is minimal and no worth consideration. So, the expenses we incurred with the pool still would not have been covered. We must have gotten our “fill” of maintaining a pool, as we haven’t owned a property with a pool since.
The next property we purchased had just been renovated. The house was originally built in the early 1960s and the AC and heating units were approximately ten years old. We elected not to purchase a home warranty due to the recent renovation and due to the age of the air units being relatively new. What we didn’t know about the property was that it hadn’t been maintained well prior to the renovation.
Also, due to the construction of the early 1960s, the electrical and plumbing became an ongoing problem. We had to replace the heating and AC units due to poor maintenance and clogged air vents. Also, we had to have the plumbing worked on multiple times for backups and leaks. We began experiencing problems with mold due to previous plumbing problems that were not resolved. The contractors who did the remodel hid the mold by painting over it with Kilz. The mold problem was revealed months later after it began to show through the paint. All of that to say, “This property was a nightmare!” This property would have been a good situation to have a home warranty. The amount we would have paid in-home warranty premiums and deductibles still would have only been one-fifth of the expense of covering all of these large and ongoing problems ourselves.
Later we purchased a property on two-and-half acres with a large custom home built in the late 1960s. The property was beautiful, but the house had suffered over recent years due to the age of the homeowners and the inability to make needed repairs. This property had older AC and heating units and appliances. We ended up replacing the appliances and doing a $60k renovation to the property to bring it up to date and fixing all of the needed repairs. We elected to get a home warranty for this property and did we get our money’s worth!!
Due to the age of the house, we had several plumbing situations that arose and were unforeseen by our original plumbing contractors. After the main sewer line broke in our crawl space we ended up getting $3,500 in repairs covered by our home warranty in a single calendar year. This more than covered the $600 annual premium. Over the three years, we owned that property our warranty ended up paying out over $15,000 in-home repairs. Needless to say, we were not their ideal customers.
At FreshStart we help our customers through many large home repair decisions. We know that it can be stressful. At times home warranties can help reduce that stress of large mechanical repairs. Always keep in mind things like foundation issues, roof leaks, water damage, and mold are not covered by home warranties and many times homeowner’s insurance as well. If you have determined that a home warranty is not right for you, we highly encourage an emergency fund that is funded monthly for all of the unexpected and uncovered issues that occur in property ownership.
If you have a home that you are concerned about the risk of mold occurring or have already found mold. Feel free to give us a call and one of our professionals would be happy to help. Our technicians are experts at spotting maintenance issues that could cause mold and can inform you of how to remedy. Its amazing how many jobs we have done as a result of neglected minor home repairs. In our next article, we will discuss the best home warranty companies for the Kansas City area and tricks in the home warranty system to achieve the maximum results.
There are many opinions about home warranties, we encourage you to consider all of them before making a decision. When purchasing a property, having a home warranty for the first year is always recommended and most of the time paid for by the seller.