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What is a Home Warranty?

What is a Home Warranty?

When purchasing or selling a home, the term Residential Service Contract (aka the home warranty) will come up as part of the negotiations. So what is a Residential Service Contract?

The Residential Service Contract’s primary goal is to make you feel protected and secure in the purchase of your new home. While the home inspection will find existing problems to the home which can be repaired before closing, the residential service contract can cover items in the home that fail because of ordinary wear and tear. Home warranties do not cover improper maintenance. For example, if someone hits a dishwasher with a hammer and it stops working, most home warranty companies will not cover the repair or replacement. As long as a reasonable effort has been made to upkeep the system or appliance and it was working on the inspection, the residential service contract should cover any repairs or replacements needed.

All companies have different levels of coverage, which usually depend on the price of the plan. Most plans cover:

  • Heating systems
  • Cooling systems
  • Plumbing systems
  • Electrical systems
  • Appliances such as:
    • Dishwasher
    • Garbage disposal
    • Oven

Residential Service Contract companies have limits and exclusions on certain items. Check your individual plan for those limits and exclusions.

If a system or appliance fails, you can call your home warranty company. Most home warranties claims centers are open 24/7 and will send a qualified service professional to make the repair or replacement for a service fee (often $50-75).

Before purchasing a residential service contract, review the contract from the home warranty company you choose before you purchase.

If you have any questions about the Residential Service Contract, contact Minteer Real Estate Team at 817-481-8890 or info@minteerrealty.com.

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