When you decide to purchase a house, it is essential for you to understand that you will be buying the risk associated with the various components of the house with it. Obtaining a home requires a substantial investment and, in most cases, depletes the homebuyers’ savings to such an extent that they cannot afford to bear the unexpected repair expenses that might arise.
This is where services like home inspection and home warranty enter the frame, for they assure buyers that the house has been well maintained by the seller. It also gives them the feeling that even if unexpected repair expenses arise in the future; they will be taken care of by the warranty company.
Speaking of home warranty and home insurance, here are a few points on what differentiates them and how they can help:
The Basic Difference
A home inspection is a professional consulting activity, the purpose of which is to determine the efficiency and effectiveness of the present state of a house’s major systems. The methodology used is a visual inspection which aims to be focused on the performance side of things rather than the cosmetic and aesthetic intricacies. At the end of the review, a home inspection report is given by the company to their customer. The home inspection report comprises of the findings that the home inspection company made during their inspection of the house. Home inspections are frequent sightings, especially when houses and properties are being purchased.
A home warranty, on the other hand, is coverage provided for the various appliances in the house that might break down during the term of the purchased home warranty plan. The provided coverage varies, depending upon the specifications of the purchased home warranty plan, and might range anywhere from repairing an appliance to replacing it. The appliances covered under the plan also vary, depending upon the specifications of the home warranty plan. Home warranties provide coverage for a year’s time, usually, and have to be renewed afterward. Home warranties are, at times, offered by sellers when they are selling their homes in an attempt to appeal to the homebuyers’ trust.
The Provided Coverage
There is an agreement between the home inspection company and the homeowner to stipulate the items, components, and appliances that will be covered under the inspection. In most cases, the home inspection company will pick and choose the items and components that they inspect, based on their expertise and training. Additional services can be added to the home inspection contract, at a homeowner’s consent, for an extra fee. It is important to note that there will always be some components that a home inspection will not cover because of the lack of visual and sensory access to that component. What this means is that if anything is covered, hidden or out of operation, then it will remain uninspected. A home inspector will also not be responsible for inspecting such components of a house that might put his health or life in danger. For instance, in case your roof is covered by a sheet of snow then a home inspector will, probably, refrain from climbing on top of it for inspection. There can be various examples of such circumstances when inspecting a component is impossible for the home inspector or just plain, old risky.
The offered coverage from home warranties, on the other hand, can be tricky to understand. Typically, home warranty contracts contain lists of such items that are included and excluded from the warranty contract. There will always be exceptions that will make a purchased home warranty plan void and, in most cases, these limitations will be written in fine print that people, often, do not even bother to read. It is of utmost importance, therefore, to pay great heed to the writings in fine prints before signing any contract, in general, whatsoever. And believe me when I say that there will be a lot of exceptions in most home warranty contracts. For example, home warranties usually do not provide any coverage for any damage to roof, flooring, underground plumbing and other similar damages, depending upon a contract to contract basis. It is important to note also that home warranties only provide coverage for appliances if they had been “well maintained” by their owner. The term “well maintained” in this case is very subjective and might result in extended arguments and friction between homeowners and home warranty companies. As you might expect, it is the verdict of the home warranty company that prevails in the end.
The cost of a home inspection varies, depending majorly upon the size of the premises. Factors such as the number of air conditioners, number of furnaces, sprinkler system and many others are the deciding factors when it comes to how much you will need to pay for a home inspection. As a rule of thumb, consider the amount charged by a home inspection company to be directly proportional to the amount of time the inspectors have to invest on your property. And you what will drive up the time required for an inspection, right? As the number of appliances and components to be inspected increase, so will your inspection cost. The inspection of an average 1,500 square feet house, typically, costs around $350. This amount may vary, of course, depending upon the factors discussed earlier.
The cost of a home warranty, on the other hand, is usually in the range of $500-$600, depending of course on the plan that the homeowner chooses. The cost of a home warranty does not change based on the size and age of a house, as is the case with a home inspection. Instead, the price of a home warranty depends, primarily, on the coverage that the home warranty plan provides. The more perks that a home warranty plan grants, the more price the home warranty company will charge for it, obviously.
The Procedure of the Repair Jobs
The modus operandi of home inspections is pretty straightforward. The home inspection company visits to inspect your house, by the set terms and then generates a home inspection report in exchange for the inspection fees. That’s it! The home inspection company is not responsible for any repairs that it might have recommended. It is you, the homeowner, who is responsible for finding a trusted contractor who can take care of the repair job or do it yourself. The matter does not concern the home inspection company, either way.
Home warranty companies, on the other hand, are responsible for bearing the costs of any repairs and replacements that might need to be done, in case an appliance breaks down by the home warranty agreement. The homeowner, however, has no say in the matter of choosing the contractor for the repair job. In case the damaged appliance needs to be replaced, the homeowner does not have any say in matters such as brand, quality, and specifications of the replacement. The contractors and brands offered by the top home warranty plans are of the utmost quality; however there have been cases in the past where the contractors of substandard home warranty companies have done more bad than good to homeowners.
The Matter of Necessity
Home inspections, as you must have understood by now, are necessary in a large number of circumstances, particularly when you are purchasing a house. Home inspections give you a fair account of everything that might be wrong with a house and might need repair or replacement. Home inspections are pivotal for homebuyers, if they wish to have an adequate idea of the quality, maintenance and wear and tear of the house that they will be purchasing. It is also advisable to conduct home inspections after some set period of time, regularly, in order to know exactly what needs repair or replacement, for broken appliances and components—such as electrical appliances—can prove to be health hazards also.
Home warranties, on the other hand, are not for all kinds of homes and homeowners. There are a number of factors—such as emergency fund, age of appliances and contractors—that determine whether or not it would be beneficial for a homeowner to get a home warranty. It is recommended, however, to offer a year’s home warranty when you are selling your house, for it will boost the chances of your house being sold early and at a good price.
Such differences and more make home warranties and home inspections, quite, different from one another. However, if one thinks about these differences, one would be forced to think that home warranties and home inspections are supposed to go hand in hand. Home inspection reports are vital for home warranties, nowadays, as it gives the home warranty companies the assurance that the house has already been inspected and all of the pre –existing issues and problems have been highlighted. A home inspection report saves a lot of time for home warranty companies, because reports from renowned home inspection companies mean that they will not have to exhaust their resources in the inspection of the premises. For that to happen, however, it is of utmost importance that the names of both of the companies are trusted and renowned.