Insurance and Finance

Everything You Need to Know About the Home Warranty

By Rick Lopez 4.21.14

Congrats, you’re buying a home! You’ve chosen a location, price, and mortgage company — and now it is time to decide on buying or passing up a home warranty.

“Having been involved in more than 2,000 real-estate transactions, I don’t think that there is a time when I would pass,” says Melissa Zavala, a broker for Broadpoint Properties. “From a buyer’s perspective, it’s great to know that many things can be repaired in a cost-effective manner, since the warranty pays for a significant portion of the cost.”

Natalie Alchadeff, a realtor in California, says she doesn’t regret buying warranties for her rental properties in Texas.

“When my tenant complains, I send the home warranty company out. The home warranty professionals fix the problem, which has saved me thousands of dollars,” Alchadeff says. “If it is not covered under the warranty, the professionals will give me a quote. Then I have a baseline price when I get a second opinion.”

Buyers should check the age of the property’s appliances and cooling and heating systems when considering buying a home warranty, says Tim Lucas, editor of According to the National Association of Home Builders, some appliances, such as gas water heaters, dishwashers, and washing machines have a life expectancy of 10 years. On the other hand, a gas furnace can last up to 18.

“If the home comes with appliances and systems that are approaching these ages, it’s a great idea to buy a home warranty,” Lucas says. “When buying a newer home, or one that has been significantly remodeled, it’s a good idea to pass. Buying a home warranty on newer systems is essentially paying double with little additional benefit.”