In the last three decades several companies have developed one year home service policies that the buyer might ask the seller to provide. A lot of people refer to them as a “home warranty”, but they are not a warranty. The service policy calls for the covered items (such as disposal or dishwasher) to be repaired if at all possible even if you are not happy with an old item.

If you have a service policy on your home and some item that is covered stops working, you call the central number and they send an independent contractor out. The contractor will tell you if it is a covered repair and if there are additional fees that you will have to pay in addition to the service fee. The additional fees are often connected with installing a new item instead of repairing an existing one. I have buyers that have not liked the policies but I have talked to many more people that extend them for additional years and say they would never own a home without one. These policies can help with very expensive repairs that you did not anticipate. It is important to remember these policies do not cover things that were broken before you bought the home, and they often do not cover the cost of any upgrades you might wish to do or might be required to do because of new government rules. There are almost a dozen different brands of the policies and each has a slightly different coverage. Read thru two or three and see which one would make you feel most comfortable. Ask your friends which one they have and what they think about it.

About 70% of all home sales involve a home warranty.