Texas Home Warranties

When purchasing a home warranty the buyer chooses any policy or plan they want and then tells the title company their choice. The title company starts the policy and obtains an invoice. (The plans are cheaper to buy with a real estate closing than after closing as a consumer.)

The invoice is paid by title through funds reconciled at closing.

If the seller agreed to contribute $600 (or whatever was negotiated in the contract), then the title company will deduct the $600 from the seller and credit the amount to the buyer to offset the cost of the home warranty 1st year policy.

If the policy chose by the buyer costs $750 and the contract says that the seller will pay $600, then the buyer will be responsible for the remaining $150.

READ BELOW TO LEARN ABOUT HOW HOME WARRANTIES WORK

When I give a list of warranty companies to my buyer to have them select, this is the way I introduce the topic:

Here is a video that explains a warranty:

https://www.youtube.com/watch?v=Q5GdLcGCwkc

How does a home warranty work?

Homeowners pay a yearly or monthly charge for home warranty coverage. When a covered breakdown of a home’s system or appliance occurs, the homeowner pays a small service call fee (normally between $60-$100) for diagnosis. In return, the home warranty company finds a contractor to diagnose and repair the covered breakdown. The home warranty company will repair the covered breakdown, or replace it if it is irreparable, as long as it is covered in the home warranty contract.

Is there a difference between home insurance and a home warranty?

Many homeowners hear about a home warranty plan and think they already have the coverage it provides with their home insurance. A home warranty plan covers components of many of the systems and appliances within a home, while home insurance usually covers the home’s structure and protects it from flooding, fire, burglary, and so on. A home needs both.

Home insurance covers the structure of a home, as well as damages that occur because of fires, floods and other natural disasters. If your dishwasher started leaking, home insurance would likely cover the water damage it caused.

 A home warranty, on the other hand, would repair or replace the failed dishwasher but wouldn’t cover the damage caused. Home insurance covers the structural part of a home, while a home warranty covers the systems and appliances within it. This is important to remember because there’s not much overlap between the two – homeowners might want both!

Example of what a home warranty might cover

A home warranty plan covers the repairs and replacements of mechanical components of a home’s major systems and appliances.

Service Call Fee:     $70

Air Conditioning and Heating

    Air Conditioning System

    Heating

Appliances

    Built-In Microwave

    Dishwasher

    Garbage Disposal

    Kitchen Exhaust Fan

    Kitchen Refrigerator

    Oven/Range/Cooktop

    Washer/Dryer

Electrical

    Electrical System

    Garage Door Opener

Plumbing

    Plumbing System

Services

    Additional Benefits

    Air Conditioning Tune-Up

    Heating Tune-Up

    Pest Control

    Re-Key Service

    Subterranean Termite Treatment