Both the home warranty and home inspection serve a different purpose but ideally work in synergy to protect home buyers and minimize risks associated with ownership. Remember, as a home buyer; you are buying 100% of the home as well as 100% of the risk. You might be buying a home with the assistance of a loan from lenders, but they will not assume any of the risks. The best way to tell the difference between a home inspection and a home warranty is to first look at them individually.
Home warranty: A home warranty is a service agreement that covers replacement or repair of major home appliances and parts of systems that typically break down over time from wear and tear. When purchasing a home warranty, the first thing you should consider is coverage. You should plan to cover items that are well maintained but a little older, expensive to replace or repair, and those necessary for your comfort living around your home. When coming up with a list of things to cover, remember that home warranties are designed to include mechanical components of appliances and systems, and not necessarily the structure of your house.
Home inspection: A home inspection, on the other hand, can be termed as a professional consulting service meant to determine the present state of the home’s systems based on a visual inspection. The inspection places emphasis on the performance of features of your property rather than design, code or cosmetic issues. They are commonly done during a real estate sale, but can also be done any other time. It’s a primarily visual examination intended to point out systems that are significantly unsafe, deficient or near the end of their usefulness.
What Is Covered?
Home warranty contracts list out the specific items that they cover. There is also a page detailing the things that won’t be included. If there are any items that you are not sure if they are covered, we highly recommend that you inquire with the warranty provider and get a response in writing. In general, as earlier mentioned, the average warranty covers homes major mechanical items with some exceptions.
Always carefully read the contract including the fine print. Most home warranties typically don’t cover the foundation, the roof, storm damage, flood damage, any “acts of God,” doors and windows, most electrical appliances, any mechanicals and appliances that weren’t in good working condition before the coverage, and so on.
Some home warranty providers offer non-evaluated plans where they don’t have to set foot on the property. Some providers send their representatives to contact thorough tests on appliances and mechanicals before coverage. If the appliances and appliances are found to have any issues, they are excluded from the coverage until repair.
Some home warranties only cover the listing; some will only be effective after the deal is sealed, while others will include both the listing as well as after closing. Most of these warranties will provide coverage for up to 1 year. You can then choose to extend the cover when it expires.
On the other hand, a home inspection, as earlier mentioned, involves visual examination of accessible features of the home. Items that are excluded and included are listed in the inspection agreement that you will sign before the inspection. If something is hidden, has excess storage or is covered over limiting the inspectors to access or view it, then that item is excluded from examination.
Air conditioners won’t be operated during early spring, late fall and winter when it’s too cold. Roofs covered in ice or snow won’t be inspected. Some roofs may not be climbed if inspectors determine that it’s not safe such as during the rain or the roof is too steep. Crawlspaces with stagnated water are also classified as unsafe. There are very many other situations that can limit the ability of the inspectors to inspect.
The items that should, but can’t be inspected are noted down in the final inspection report and why. When it comes to ancillary inspection services, the inspector will choose what to insect based on their training, area of expertise and equipment. Some companies charge additional fees for these extra services. Such services may include mold sampling, radon testing, FHA inspections, energy audits, and more.
Think of home inspection as a snapshot of the state of the property on the inspection date. The primary purpose of the inspection is to provide you with an unbiased third party professional opinion on the state of the home. It enables you to make a conscious decision during the purchase of the property. Most home inspectors are generalized but not experts, meaning that if they find an issue, they will have to refer you to a specialist such as licensed plumbers, Electricians, Structural Engineers, and so on. As a buyer, after the inspection, you may choose to take charge of the repairs, request the seller to carry out the repairs or abandon the deal.
Who Pays? A home warranty can be paid by the buyer, the seller or even the realtor involved. Sellers can pay for the home warranty as a marketing strategy to attract more buyers. A home that has home warranty cover gives the buyer a warm feeling and appeals to more buyers than a home without coverage. This also offers the seller some protection in case some appliances or mechanicals fail when the house is still on the market.
Some realtors take the home warranty coverage very seriously that they decide to pay for it themselves. The buyer, on the other hand, may choose to purchase the home warranty coverage to reduce maintenance costs and have peace of mind. The seller or the buyer pays the fee during the closing of the deal. The fee for a home inspection is paid at the end of the inspection by the client. In some rare cases, the cost can be paid by the buyer at closing. One major reason why the fee is usually paid on site is some real estate transaction might not proceed to close after issues emerge during the inspection.
Perhaps the major the difference between a home inspection and a home warranty is the home inspection gives the actual state of the condition of the property involved while home warranty acts as insurance for the covered appliances and mechanicals. The two components might sound a little different, but as you’ve seen from above, they all work to help the home buyer and seller reduce the risk of home ownership.