Topics:Real Estate Home Warranty 101 Budget Smart Homeowner Tips Repair and Maintenance Home Warranty Companies Interior Design Press Releases
June 16th, 2022
May 27th, 2022
When the weather starts getting colder and we all retreat into our homes to stay warm, it’s important to make sure that your house is in good condition to withstand the outdoor elements. Make sure you check the following systems and parts of your home to prepare for winter weather: RoofAtticFireplace and chimneyWindows and doorsCeiling fansAir conditionerFurnaceHeat pumpPipesBoilerSump pumpSmoke detectors and carbon monoxide detectors Roof The winter months can bring unpredictable weather beyond snowfall, such as rain and/or high winds. For that reason, it’s a good idea to visually check out your roof before the weather changes. You may not even have to climb up onto your roof — just taking a look at it from the ground can give you a quick visual of its condition. If you’d like to do a more comprehensive check of your roof, you can climb up and check the shingles and other areas of concern. Take a look at your roof for any signs of damage. Look out for any signs of damaged, buckled, or missing shingles. Replace loose shingles and repair any visual damage. It is important to visually inspect your roof, particularly if you live in an area that experiences snowfall. The cycle of snow accumulating, freezing, and thawing can be damaging to your roof; check your roof once the winter season has ended in case it has incurred any damage. Attic A lot of heat in a home can be lost through a poorly insulated attic. It is important to inspect your attic insulation and assess whether or not it needs to be replaced. Inspect and install insulation. Inspecting insulation will typically require that you get up into your attic and then measure how much insulation you have. Insulation level recommendations will vary depending on where you live, but a good rule of thumb is as follows: if your insulation measures below your joist, it probably isn’t enough insulation. A standard joist is typically measured at 2” X 8”, and you should have anywhere from 13 to 18 inches of insulation, depending on your location. For more information regarding insulation, check out this insulation guide from Insulation Institute. Fireplace and chimney While the weather outside is frightful, the fire will only be delightful if your fireplace and chimney are in good repair. Schedule a chimney inspection and cleaning. Debris, soot, leaves, and even bird nests can accumulate in your chimney, which could cause chimney fires if not swept away. Thus, it’s important to get your chimney inspected and cleaned for the winter months. Windows and doors If heat is escaping your home, or cold air is entering, windows and doors are typically the culprit. For that reason, it’s important to prepare your home for colder weather by doing the following: Check and replace weatherstripping. Check and repair caulking, but be careful where you caulk. You don’t want to cut off small openings necessary for air flow and/or drainage. It is recommended that you don’t caulk certain exterior fixtures of your home, as well as on operable windows and doors that are in frequent use. In most cases, weatherstripping will be the better option, especially for windows and doors. Remove window screens. Doing so can maximize natural light, in addition to protecting your window frames from damage caused by debris or snow getting trapped in between the screen and your windows. Ceiling fans It can be easy to forget about your ceiling fans, because you obviously wouldn’t be running them through the winter anyways. But in terms of winter preparation, your ceiling fans aren’t something you should ignore. Reverse your ceiling fans. Reversing your ceiling fans can give your heating system a helping hand by forcing warm air down that has risen. This could allow you to lower your thermostat, helping you save more energy and cut back on heating costs. Air conditioner You likely won’t be using your air conditioning system during the cold winter months, but that doesn’t mean you should just turn it off and ignore it. Winterize your air conditioner. According to Climate Care, there are five steps to winterize your air conditioner: Turn your air conditioner off. Clean units. Change the filters. Check pipe insulation. Cover your air conditioner. You may be able to clean and prepare your air conditioner for the winter months by yourself, but it can also be helpful to have a technician come check, clean, and cover it, ensuring that it will remain in good condition throughout the winter. Furnace One of the most important things to take care of before the winter months is your furnace. Get your furnace inspected. Clean air ducts. Change furnace filters. Getting your furnace inspected early on can ensure that you catch any potential problems, or even buy a new furnace, if needed, before the cold sets in. You may be able to easily clean furnace air ducts and change filters easily by yourself, but it is best to have a professional come to inspect your furnace to make sure that everything is working properly. Heat pump You can follow some of the following steps to prepare your heat pump for the winter months: Clear the area around your heat pump. Change your heat pump filter. Pipes Pipes exposed to cold air can burst, which can cause a lot of damage to your home. So you’ll want to take a few steps to keep your pipes from freezing: Inspect exterior wall pipes. Consider adding insulation to your pipes. Keep your thermostat at at least 55 degrees. This is especially important if you’re going to be out of town. Boiler You wouldn’t want your boiler breaking down during the winter months, so you can take some of the following steps to make sure it’s in good condition before it starts getting cold: Turn it on before winter starts. Check for leaks or any other damage. Schedule a boiler maintenance appointment. Sump pump A sump pump is used to detect water levels and keep them from rising. Typically located in the basement of a home, it is important to ensure that your sump pump is in good condition or else you could risk a flood. Take some of the following steps to properly winterize your sump pump: Remove the sump pump discharge hose. If water freezes inside the hose, it would render the pump unusable until water thaws. Clear out any debris. Test the pump regularly. Simply run some water through to ensure that everything is working properly. Never unplug your sump pump. Smoke detectors and carbon monoxide detectors Having functioning smoke detectors and carbon monoxide detectors is important all year round. However, during the winter months there is less fresh air flow in your home because your windows will be closed to keep cold air out. This can result in a higher risk of carbon monoxide build-up. Check your smoke detectors and carbon monoxide detectors. The bottom line Most maintenance can be done visually and quickly. However, while there are many inspections and fixes that you may be able to do yourself, it can always be a good rule of thumb to schedule professional maintenance, especially for home systems. It is important to ensure that all your home systems are functioning properly when winter sets in. But some maintenance can even save you more money on your energy bills, like reversing your ceiling fans and checking your attic insulation, which can both help regulate the heat in your home.
Things go wrong all the time. Your freezer breaks and the food thaws out. Your AC’s filter clogs and leaves you high and dry in a heatwave. Your washer floods the laundry room. If you manage your own household, you’ve probably had a few emergencies from neglected appliances. And the more appliances you have, the more often you’re fixing or replacing them. What if you could prolong the life of your microwave and save a hundred dollars for another day? What if you could add a couple more years to the life of your dishwasher, buying you time to save money for when it will ultimately need a replacement? We’ve asked the experts about simple tips for cleaning your major appliances. With this advice, you can help your appliances last longer. Many of these tips will only cost you a few minutes of your day, but they could save you hundreds of dollars in the long run. Jump to: Dishwasher Microwave Washing machine Clothes dryer Refrigerator and freezer Stove and oven Dishwasher You might assume that your dishwasher is clean. Water and soap are constantly moving through it, so would the interior even need maintenance? Dishwashers need TLC like any other appliance. Food particles and soap scum can build up, and it can make your dishwasher germy and less effective. And if you have hard water, mineral build ups can decrease water flow. Here’s what you can do to keep your dishwasher clean and fresh. Use the dishwasher frequently and air it out If you assumed the dishwasher cleans itself, you’re partially right. “To keep dishwater working in good condition, the tip is using it as often as possible,” says Norma Capin, Operations Manager at Dallas Maids. But you also need to air it out: “Leave it open for some minutes after using it.” A dishwasher that isn’t used frequently can trap food and grease. And a dark and moist place with leftover food can build up mold — that’s the last thing you want scrubbing your plates and silverware. Run a cleaning cycle — or make your own cleaning cycle Some dishwashers have a cleaning feature, making your job a little easier. “Run the ‘clean dishwasher’ cycle once a month,” suggests Ahmed Ali, outreach consultant for Centriq. “This cycle will thoroughly clean all the parts and remove any mineral buildup to ensure the appliance will last longer.” If your dishwasher doesn’t have this feature, there’s the DIY option to clear your dishwasher out and keep it smelling fresh: “Deodorize it by placing a bowl of synthetic vinegar on the top rack and running it empty for a full cycle.” Clean your spray arms Some parts of your dishwasher need personalized fine-tuning. For spray arms, you’ll probably have to get your hands dirty. The experts at Molly Maid reached out to us with some tips on cleaning a spray arm: “To clean them, simply remove the arms, hold them over the kitchen sink one at a time, and dislodge food particles with a toothpick. Run water through the holes to make sure they’re clear, and reinstall the arms in the dishwasher.” Watch how you arrange your dishes When it’s time to clean your dishes, it’s tempting to throw all your items in your dishwasher and hope it cleans every surface area. But if you aren’t careful, you can damage your appliance. “Do not to put sharp items in the dishwasher racks,” cautions Ron Shimek, president of Mr. Appliance. “They are made of metal covered with plastic and sharp items can cause nicks or cuts to the plastic covering, which later turns into rust and breaks down the machine.” Microwave The microwave is a gorey battlefield of food preparation, featuring everything from overflowing soup to exploding rice and beans. You might have a few sauce stains hidden away in your microwave right now. Did you know that neglecting your microwave can make it rusty and unsafe? We didn’t, until Harriet Jones, a cleaning expert and supervisor for Go Cleaners London, clued us in: “Once rust eats its way through the interior cavity, it takes no more than a couple of years to fully destroy the microwave oven, not to mention the unsanitary conditions for food preparation that rust establishes.” It’s worth cleaning your microwave to prevent this. Give your microwave a steam treatment To deep-clean a microwave, Jones suggests you start by finding a microwave-safe bowl and filling it with equal parts white vinegar and water. If you don’t want the bowl to overflow, put a piece of wood in, like a toothpick. Then you let the microwave do its work: “Tuck the bowl in the microwave and nuke it for 10 minutes. The steam, produced by the heat and the homemade cleaner, will loosen the grime, making it effortless to take any leftovers off from the kitchen appliance.” That’s easier than scrubbing away at dried pieces of leftover food. Jones says that once you do that, you can wipe your microwave down with a sponge or cloth. Washing machine The washing machine is another damp, dark place where germs love to hide out. A washing machine can’t do much for your clothes when it’s dirty and moldy; in fact, it can potentially ruin them. Washing machines can also stop draining if you don’t keep them gunk free. Maintain a clean washing machine to maintain clean clothes. Establish a monthly routine A cleaning routine will help your washing machine last longer. Afoma Umesi, chief editor of Oh So Spotless, recommends cleaning your machine once a month. Companies sell washing machine cleaning powder, and you might consider buying a packet, dumping it in, and running a cycle if you have a particularly nasty machine. However, you can also maintain your appliance with household items you likely have on hand. “Use a damp cloth to clean behind the rubber gaskets and run a hot water cycle with a cup of vinegar to clean out the drum,” suggests Umesi. Vinegar’s acidity can wash away soap scum and mineral buildups, so it should help to keep your washing machine drum cleaner. Clear out the detergent drawer Fabric softener and laundry detergent can build up and ruin your washing machine’s ability to clean. “Don't forget to clean the detergent drawer,” reminds Umesi, “as all the excess detergent can clog your drain in time.” There are a lot of different ways you can do this, but many experts recommend removing the drawer and cleaning it with bleach or soapy water. Replace your washing machine’s hoses Shimek of Mr. Appliance has another pro tip: “Replace the brittle plastic hoses that come with the machine with steel, flexible ones that are made for long-term use.” It’s not hard to tell why a flexible hose would be beneficial. Many manufacturers make no-burst water hoses that are going to save you from expensive flooding mishaps. Other manufacturers make auto-shutoff hoses that can sense when a hose has burst and stop water flow. Don’t overload the machine When you’re cleaning your clothes, you might want to maximize how much you can fit into one load. But take into account that you should set a limit. “Don't overload the machine with clothes,” Shimek advises. “This puts a strain on the motor, which will cause it to wear out faster.” Clothes dryer Your washing machine and dryer are the fire and ice of your laundry room — or at least, the fire and water. While you have to worry about a washing machine draining improperly, molding, or flooding your room, you have to worry about too much heat with your dryer. Mold can still be an issue in the nooks and crannies of a clothes dryer, but a buildup of lint and dust in your vents can cause a fire. Clear out the lint drawer It’s simple advice, but many people ignore this easy tip that can take only minutes of your time. Afoma Umesi agrees: “The best way to maintain your dryer is to do the one thing you're often too lazy to do: clean out the lint drawer. When your lint drawer is blocked, your dryer works longer, which, of course, wears it out faster.” Wash off the lint trap If you have a removable lint trap, you can do a little extra work to keep your lint drawer unblocked. Ron Shimek suggests that you scrub it off: “Take the lint trap and scrub it with soap and water over the kitchen sink. Some dryers have a lint filter on the bottom or back of the machine, so check yours, and make sure you are cleaning the lint from that on a regular basis.” Pack lighter to avoid wearing the motor down Just like the washing machine, Shimek reminded us that the dryer shouldn’t be packed too full. If a dryer is struggling to tumble a larger load, this could damage the motor. Refrigerator and freezer Your fridge and freezer see a lot of incoming and outbound traffic, so it’s a place that’s likely to get hectic. It only takes a couple seconds to spill leftovers while you’re taking them out of the fridge, but it will take several minutes to clean it up. Naturally, we sometimes do our damage control half-heartedly. But you shouldn’t neglect a routine cleaning of your fridge, and not just the interior, but the exterior as well. Remove dust from the outside Don’t let your fridge sit and gather dust. Matthias Alleckna, an energy analyst for EnergyRates.ca, notes that “Dust is . . . a really good insulator, which means that it makes it harder for large appliances like your fridge to resist heat, making it more inefficient. At least once every six months, vacuum off the dust off your refrigerator coils behind the fridge.” Clean behind the fridge When was the last time you looked behind your fridge? It’s probably not pretty. But since our last point mentions that you need to get back there to dust, you might also have time to clean up a little more. "Dirty coils can strain the compressor, which can result in a shorter refrigerator’s lifespan,” mentions Ahmed Ali from Centriq. In addition to dusting off your coils, he suggests that you mop behind your fridge, because this “will put less stress on the fridge’s motor and prolong the lifespan.” Clean the grille up front You can also vacuum off the grille at the bottom of the front side of your fridge. The experts at Molly Maid suggest this, and they explain why: “This improves airflow to the condenser to boost refrigerator efficiency by about 3 to 5 percent.” Clear out the inside It can be exasperating how quickly your food spoils. One day, your shredded cheese is perfect. The next day, it’s hosting a ball of green mold. That’s why you need to be cycling through your fridge and throwing out what’s no longer good. If you let food accumulate, Ali warns that it can damage your fridge: “Don’t overfill your fridge as it puts a load on the compressor and blocks airflow. Clean it from the inside once a month.” The experts from Molly Maid have a quick guide to cleaning your fridge to avoid overflow, mold, and smelly leftovers: “You can wait several months between deep-cleanings if you take a few simple steps to maintain a passable fridge for that long. Immediately — Rinse off dirty jars and bottles such as jam, salsa, and ketchup. Also, make an effort to catch spills right away to avoid the hassle of sticky spots in your fridge. Once a week — Throw out any rotting food and expired juices/milk/yogurt. Every 2 months — Leave an open box of baking soda in the fridge. This is an effective, affordable method for absorbing odors. The odor-absorbing capabilities of baking soda diminish after about two months, so that’s how often you should replace it. Every 3–4 months — Time to deep-clean! Purge anything old/things you never use Take the crisper and meat drawers out Wipe down interior with a cloth soaked in warm, soapy water Dry all washed surfaces Set a fresh baking soda box in a corner Clean exterior door with a cloth soaked in warm, soapy water — if you have stainless steel, remove grime with a store-bought stainless steel spray.” Periodically defrost Defrosting your freezer is like a quick juice detox — except it actually helps you out in the long-term. Alleckna explained that ice built up around your vents signifies that it might be time for a freezer defrost. “You can remove the food from it and unplug it for roughly 30 minutes until the ice melts,” he explains. Stove and oven Many ovens have a self-cleaning feature; it’s pretty straightforward. But there are a couple other quick cleaning tips that can keep your stove and oven fresh. Use lime to reduce odors Once a self-clean of the oven is complete, you can usually scrape out the charred remains of leftover food. But if you’re still concerned about grease and other stains, try steaming your oven. Norma Capin describes the process: “After baking or cooking in the oven, don't turn it off. Put half a cup of lime juice in it for 15 mins. [This] will help you get rid of the smells right after. It also has antibacterial properties, and after doing it you just have to wipe the oven since it will loosen grease from the walls.” Clean your burners Don’t forget the work that needs to be done on your stovetop. “Many stoves have removable burners, and cleaning these can save you from the fees that come with having to replace them,” advises Bailey Carson, head of cleaning at Handy. “Before cleaning, make sure your stove is completely cool from the last time it was turned on. Then, remove the burners and scrub them with soap and the rough side of a sponge or steel wool to remove any cooked on food remnants.” Carson reminds cleaners to be careful about working near anything flammable. And if you have an electric stove, Carson suggests that you spray it with a multipurpose cleaner and wipe it down with a rag. What now? You might have a long to-do list of chores now, but as you incorporate these simple cleaning tips into your life, you'll find many of them to be quick tasks that have a big payoff. Long-lasting appliances can save you heaps of money, so get to work deep cleaning your fridge and save your pennies for another day.
report_problem Correction: A previous version of this article incorrectly described State Farm as the best option for septic line protection. While State Farm does offer service line coverage, septic lines are NOT fully covered. State Farm's Service Line Endorsement policy only covers the wastewater line between the house and septic tank. It excludes coverage for septic systems, including motors, pumps, tanks, leach fields, and piping extending from the tank to the leach fields. Septic system malfunctions can make for expensive accidents. The average cost to repair a septic tank is $3,198, and that's lowballing it compared to the cost of installing a new system or entirely replacing an old one, which will knock someone back several thousand dollars. It's natural to get cold feet for a septic system when you think of it like this. "We have seen deals fall apart for originally enthusiastic clients, who upon completing their inspections and learning about what having a system of this sort means ultimately backed out," says Alison Bernstein, real estate expert for Suburban Jungle. "They became concerned about the price for a potential replacement, materials, maintenance, etc." If you have a septic system, you're faced with a set of unique challenges that aren't familiar to everyone: sewage backup, leach field overflow, and damaged pipes, to name a few. And with some of these challenges, you can face major costs for repair. It's natural that you want a homeowner's insurance or warranty plan that can help you take care of the costs, whether it's damage to your property or damage to the system. If you're looking for the best options for your septic system, we're going to cover the two main types of coverage — homeowners insurance and home warranty plans — and discuss their similarities and differences. Neither will cover every type of damage to your system, and that's why you should choose your coverage wisely and understand what it offers. Read on to find the best types of coverage for a septic system, and our recommendations. What will homeowners insurance cover for my septic system? In general, homeowners insurance policies cover damage to your home caused by accidents that are sudden and unintended, such as fires, explosions, and theft.However, septic system coverage is limited by the following exclusions: Homeowner negligence— Basic homeowners insurance won't cover anything that was caused by your negligence, such as flushing solid objects down your system or placing heavy objects over the tank. Acts of God — Many insurance companies don't cover flood and earthquake damage — you'll likely need a separate policy to address these perils. As the experts from Fantastic Services note, "Catastrophe insurance policies have a role when disastrous events harm your house. This type of insurance accompanies your standard homeowners' coverage." Systems exterior to the home's foundation — Some insurance plans won't provide full coverage to features outside the home, including your septic system. Here's the rub: Septic systems are generally located outside the four walls of your home. Consequently, it's regular for damage to the septic system itself to be unprotected by a standard homeowners insurance policy, unless the company offers a specific add-on septic system policy. Not Covered By Homeowners Insurance: Most Damage to the Septic System Itself "External damage consists of parking or driving a heavy piece of equipment over the septic tank itself," explains Garrett Lang, CMO of A1 Porta Potty. "Septic tanks are typically 1,000–2,000-gallon concrete boxes. If a heavy enough truck drives over the top of a septic tank, it could cave in the holding tank." Homeowners insurance usually won't cover that, and Lang notes that the only way to fix this damage is to replace the tank. Negligence can also result in internal damage that most homeowners' insurance policies won't cover. "Internal damage consists of sludge exiting the concrete holding tank," Lang explains. "This is what happens when you do not pump the tank every few years. . . . When it dries it can clog up your distribution box or lateral lines and stop the excess water from leaving the tank, rendering your plumbing useless. The only way to remove the dried sludge is to dig up the system." Again, not likely to be something an insurance policy will help you with. Covered By Homeowners Insurance: Damage to Your Home Caused By Septic Problems In fact, Lang advises that most insurance companies aren't going to help until the septic system damages your house, such as in instances where the system clogs and floods your home. What will a home warranty cover for my septic system? Unlike homeowners insurance, a home warranty policy covers the appliances in/around your home from normal wear and tear. Most home warranty plans won't cover these circumstances: Pre-existing conditions — Appliances that are already damaged, don't qualify for coverage. Many home warranty policies require you to wait 30 days before the plan will take effect to ensure that you didn't sign for a plan because you knew one of your devices needed immediate repair. Improper care — Appliances with unnatural wear and tear (such as a system damaged from the failure to pump it) won't qualify for home warranty coverage, either. You'll have to know how to take care of your septic system to be sure the damage was not inflicted by your household. Appliances and systems not specifically mentioned — Appliances not outlined for coverage in the plan won't be eligible. In other words, you're likely going to need a warranty plan with add-on coverage to take care of your septic system; most warranty providers don't include septic systems in their basic packages, but offer septic policy coverage for an additional price. Out-of-network technician damage — If you hire a technician outside of a home warranty companies' network, once you sign its contract, you could be out of luck for any damages the technician would create. "There are many unskilled plumbers out there and amateur septic system installation is a common issue," explain the experts at Fantastic Services. "Before you book a service, know how to find a reliable plumber near you." Coverage for a septic system can be easier to find with a home warranty company than some homeowners insurance providers, which typically require you to submit your information for a quote before they'll answer questions. Here is our top pick for septic system coverage under a home warranty: Our recommendation: Choice Home Warranty Choice Home Warranty is our top-rated home warranty company in the industry. The company has been in business for over a decade, and you can choose septic system coverage for $120 per year and a septic tank pumping for $65 per year. Choice Home Warranty also covers septic system parts, so if items like the tank, line, or pump itself break down, Choice Warranty can help. As Choice Home Warranty's website notes, "The sewage ejector pump, septic tank and line from the house are just a couple of things that are covered in a basic package. There are a few things that we can't cover however, so be sure to read the fine print." Does a manufacturer's warranty cover a septic system? You can't rely on a manufacturer's warranty for your septic system like you might be able to for home appliances like your washing machine or oven. "As far as manufacturers go, there are really no manufacturers' warranties," Lang explains. "The entire system consists of individual pieces installed by an independent contractor." And besides, the average life of a septic system is 25 to 30 years. Most manufacturer's warranties only cover a fraction of that time for appliances, so relying on a warranty wouldn't have been a good lifetime option even if it was an option. Are there any other septic protection plans to know about? The experts from Fantastic Services add that there are a few options outside your basic homeowners insurance: "A service line coverage saves a lot of trouble when damages occur. The policy covers any cost of repairs caused by the lines which provide water, power, and natural gas to your property. They'll also compensate you if a tree root pierces right through your service line." For example, HomeServe USA, offers protection plans that cover damages to plumbing service lines, including sewer and septic. For example, the Exterior Sewer/Septic Line Coverage Plan covers the following: Locating the blockage Excavation (and backfilling) Replacement or repair of pipes, seals, and joints Unblocking Fitting of external valves Pipe cutting, fusing, and welding Restoration of your grass, yard, landscaping, and pavement, when it was disturbed by a covered repair In sum Homeowners thankfully have a couple options for septic system coverage, and some warranty and insurance plans might be worth looking into. However, you should also expect that your policy won't cover everything and plan for routine maintenance on your septic system. With regular maintenance and vigilance, your septic system should have very few accidents.
You've finally found the perfect home for you and your family. Now all that's left is to put your house on the market. You're probably eager to get your old home off your hands as soon as possible. But with so many homes for sale, how can you expect to stand out from the crowd? Listing your home at a competitive price and having a quality real estate agent are great ways to make your home stand out from the rest. But what else can you do to make your home the best option in relation to the competition? If you're getting ready to sell your home, consider offering a home warranty. It can be a great tool to appeal to potential buyers and to set you apart from the competition. We've compiled the information below to help you decide if getting a home warranty is the right choice for you and your situation. What is a home warranty? A home warranty covers systems and appliances when they need repairs or replacement. When you get a home warranty, certain appliances in your home are covered for restoration or replacement. This is for those who don't have the funds to make expensive repairs to systems and appliances in the home. It's not uncommon for home warranty companies to offer customized home warranty coverage. You'll be able to choose which systems and appliances you want to be covered. This is a great opportunity to cover only older and/or costly systems. And if you choose to take certain appliances with you, such as a microwave or washer and dryer, you can omit it from your home warranty coverage. Will a home warranty affect my sale? Offering a home warranty can positively affect your sale. Home warranties are appealing to buyers, so it could help you sell your house faster. This is especially the case if the homes in your area stay on the market a little longer than you'd like. If anything, a home warranty can help motivate buyers to seal the deal. Harry Keifer, a co-founder of Achosa Home Warranty, LLC (“ACHOSA”) agrees that "a home warranty can often be a tipping point that assists both the buyer and seller to come to agreeable terms for the sale of a home as home warranties give buyers peace of mind. The history of a property and maintenance of its systems are not always available for a client, so the home warranty can protect against the high costs associated with unexpected home repairs." Carol Gee, an experienced home warranty customer tells us that when her sellers offered her and her husband a home warranty with the home, it made all the difference. "The sellers that we bought our lovely, older home from gave us the home warranty for one year and we continue to use a home warranty to this day. If I ever sell my home, I will definitely provide a home warranty." "As new, first-time homeowners (my husband and I are both retired military veterans) who had lived in military homes almost our entire 20 years in service, we were not aware of home warranties and their value. Warranties are really beneficial, especially when you have older appliances." Gee notes that even if you have newer appliances, a home warranty is still worth it. "Most folks think a home warranty isn't needed when their home and appliances are new. However, unless you have several thousand dollars to repair systems and appliances such as your AC, water heater, and oven (all the items I've used my home warranty for), a home warranty will save you a lot of money, even if you have newer appliances. Home warranties to me are much like health and car insurance. You hope you never have to use them but are happy when you do." How much do home warranties cost? If you're considering getting a home warranty for the house you're selling, there are a few things to keep in mind. Depending on the coverage you choose, a home warranty can cost anywhere from $300 to $700 a year. Typically, home warranties last for a year after the closing date on the new home. And depending on the company, service fees per repair can cost between $60 and $100. What are the benefits of offering a home warranty? It's an incentive for buyers Offering a home warranty can be a good incentive for potential buyers. New and experienced buyers alike appreciate the safety net that a home warranty provides. The last thing they'll want to do is get trapped with unexpected expenses on their new home. Especially if the home's appliances are a few years old, a home warranty can save them money. It gives buyers peace of mind Any home that might be considered hard-to-sell will greatly benefit from a home warranty. For example, if you're selling an older home, providing a warranty is a no-brainer. For buyers who are drawn to the visual charm of an older home but who balk at the thought of out-of-date or worn-down appliances, a warranty gives added peace-of-mind. More buyers will take interest in your sale If your home has been sitting on the market for a while, a home warranty can help drum up some interest. It could be the tipping point for potential buyers who weren't previously interested in your home or who are choosing between multiple options. Companies provide reliable technicians Robert Taylor, a home rehabber/flipper in the Sacramento region, tells us that buyers can have peace of mind "knowing a reputable repair person will be doing the repair. They won't need to spend time looking for a qualified person or wondering if the technicians are going to rip them off trying to sell something they don't need. The last thing you need when you have an appliance failure is a salesperson trying to sell you a brand new system when all you need is a thirty dollar part." It covers current building standards Taylor also explains that home warranties cover current building standards in your area, which could save you a great deal of money. "A premium home warranty plan is coverage for repairs that may involve additional costs to bring repairs up to current building standards. For instance, what if a previous homeowner's installation, repair or modification was not done according to local building codes? A premium home warranty plan will provide funds toward any expenses you may encounter in meeting current building standards. "In some cases, appliances that fail may also require upgrading other components. For example, in California, if you replace your HVAC unit, you'll be required to upgrade your ducting to be energy efficient (Title 24). If you buy only a budget home warranty [or no home warranty at all], you could end up paying several thousand dollars for the upgrades out of your own pocket." It saves buyers money Benjamin Ross, Realtor and Landlord, notes that, "Home warranties are very affordable and offer the new homeowner, who is still a stranger to his new house, a little peace of mind that everything will be okay. I would say from my experience that the most sought after benefit a home warranty has to offer is the ability for the homeowner to have the HVAC system repaired or replaced affordably." Repairs like this can be extremely costly, especially for a new homeowner. Knowing these types of repairs will be covered under a home warranty could put potential buyers at ease. Clara Nicolosi, Owner and Broker of RE/MAX in Hot Springs, Arkansas, agrees with Ross that home warranties are a great benefit, especially for new homeowners. "I am a big fan of Home Warranties, especially for first time home buyers. The advantage of having the home warranty is that many of the mechanical and electrical items in the home will be repaired at a much-reduced cost. The cost is typically a "trade fee" and this amount can vary by home warranty company, but it is typically around $75." That is a small price to pay for a repair or replacement of a big system or appliance that would otherwise cost hundreds or thousands of dollars. For a new homeowner, that could do wonders for your budget. "Having a heat pump go out in the winter and only paying a trade fee to get it repaired, or in some cases replaced, can make or break a new home buyer's budget. I would shop around and find the best home warranty company for your situation, and I am a big fan of having the name and phone number of a representative (a warm body)." Taylor knows that not all buyers will think they need a home warranty, but it's important to explain to buyers that the peace of mind and added protection is worth it. "Buyers may be tempted to avoid a home warranty to save on costs, but it's always a good idea to obtain one, even if your home is brand new. You should think of a home warranty like an insurance policy. You wouldn't think of buying a house without fire insurance. It's just as prudent to make sure you include a home warranty when you buy a home. "After purchasing a home, you may not have the financial ability to handle any significant repairs or equipment failures. Appliances, HVAC systems, and hot water heaters can all fail without notice, even when they look brand new. It's hard to predict if or when an appliance will fail, just like trying to predict if you'll have a house fire." When is a home warranty unnecessary? When your home will sell quickly without one As hard as it is to believe, there might be some situations in which offering a home warranty isn't necessary. If other homes in your area are selling quickly, then it's not worth spending your money on a home warranty. Buyers are clearly already looking for homes in your general area, so you probably don't have to worry about your house sitting on the market for too long. When the home you're selling is a foreclosure Ross also explains that a home warranty likely isn't necessary if it's a home that needs major repairs — a foreclosure, for example, that is being bought by investors looking to buy cheap and flip the home quickly would not be interested in a home warranty. "This is a good thing as many of these homes are not eligible for a full home warranty anyways. Other than that, I can see no reason why a buyer would not want a home warranty included in the sale of their new home." What are the downsides to a home warranty? There's no pre-existing condition coverage Warranty companies have a few specific requirements to keep in mind. Home warranties don't fix pre-existing conditions or appliances that are already broken. Also, your buyers must regularly check and maintain every system and appliance covered by the warranty. An appliance that breaks down due to a lack of maintenance probably isn't covered. The homeowners would have to arrange and pay for those repairs themselves. You can't receive coverage for damages incurred by a broken system or appliance A warranty covers any appliance or system that's broken, but it doesn't repair any damages that occur as a result of the broken appliance. For example, if a dishwasher malfunctions and overflows, the warranty fixes or replaces the dishwasher. But it doesn't repair water damage that occurs because of the broken dishwasher. Again, that'll be left to the homeowners to arrange and pay for those repairs on their own — or use their homeowner's insurance. They require hefty contracts Ross also tells us the downside to a home warranty is the hefty contract you have to sign. "Sometimes you need to be a lawyer to fully understand the home warranty contract. For the typical homeowner, there is a lot left to assumption. It takes a lot of effort to dig down and see what your home warranty is really all about. Also, home warranty companies will go to great measures to repair before they replace. You might have an outdated HVAC system that really should be replaced, but the home warranty company may be reluctant and opt to repair rather than replace it. Most home warranty companies will go to great lengths to band-aid it for as long as they can. This can be very frustrating for the homeowner." Certain companies may have slow repair times Nicolosi also notes another downside. "A downside is each home warranty company has its rules and response times, and sometimes these may not align with how fast we would like the repair completed." To make this as convenient as possible, Nicolosi suggests "Do your research and pick the home warranty that is right for you." Look at home warranty reviews and see which company has positive feedback from consumers and quick response times. This will ensure you are satisfied with your home warranty company because they are responsive and have a satisfied customer base. How can I find a good warranty? Do your research Before you take the plunge, do some research to ensure that you're buying the best warranty. When you get on the phone with a warranty company, there are a few questions you want to ask. With so many warranty companies out there, it's important to make sure you don't get scammed. You want to know what to look for in terms of reputable warranty companies. Read the fine print When you finally decide on a company, make sure to read the fine print. There might be some terms and conditions that cause some problems in the future. For example, keep an eye on how long the warranty contract lasts. If it's longer than a year, you may have reason to be suspicious. Keifer recommends "that you do your own initial research on the market and on real estate professionals in your area to get started. Clarity is important, so take the time to read the fine print and ask questions along the way. Partnering with a reputable real estate professional that has quality local market insights is the best way to ensure your success in promptly selling your home at a price that meets your expectations." What else should I consider when selling a home? Think about getting a home inspection Sure, a home warranty is a convenient service for new homeowners. But chances are, they'll prefer not having to use it at all. Get a pre-home inspection to make sure that all major appliances and systems are running smoothly. Getting a home inspection will cost extra, but it's well worth it. It'll also give you a good idea of what your net proceeds are. Repair appliances and make necessary upgrades If any of your appliances are a bit worn down, make any and all repairs necessary. Even consider making upgrades if an appliance or two are in bad shape. Any steps you can take that will make the move-in process easier for potential buyers are well worth it. Provide a warranty credit Ross also suggests giving the buyer a warranty credit. "Assuming you are selling a functional home, you should offer your prospective buyers a warranty credit. This tells them that you are comfortable with the home's operating systems. Is a home warranty worth it? That's the big question. Should a seller offer a home warranty? Offering a home warranty can increase prospective buyers' interest in your home. You can avoid a few major problems for your home buyers — and yourself — by making sure that you choose a trustworthy warranty company with an excellent reputation. Most buyers will appreciate a home warranty with their new home. If your home has been on the market for a while, it'll most likely help speed things along. Don't underestimate the power of free services. Post also contributed by Natalie Issa Natalie Issa is a content specialist for Credit.com. Her experience spans working with a variety of content, including blog posts and journalistic articles, as well as film and podcasts. She's applied her writing and editing expertise in the retail and digital industries at companies, such as Overstock.com and Deseret Digital Media, while applying her creativity to passion projects in her personal time.
Like many homeowners, you've probably wondered if you should get a home warranty. You want protection for your home systems, but is it worth the cost? There are mixed opinions about whether purchasing a home warranty is the right choice, and it can be a difficult decision. With the information below, you can decide for yourself if a home warranty is right for you. What is a home warranty? A home warranty is a service agreement meant to cover the repair or replacement of systems and appliances in your home. If a covered system or appliance needs fixing or replacing, you make a claim to your home warranty company, and a service provider will come to your home to diagnose the problem and determine how to move forward with fixing or replacing the item. Why do I need a home warranty if I already have homeowners insurance? A home warranty is different than homeowners insurance. Although they both offer protection for the home, it is a different type of coverage. Homeowners insurance protects you if your house sustains damage from a fire, lightning strike, windstorm, theft, etc. What does a home warranty cover? A home warranty covers major systems and appliances in your home, such as cooling and heating systems, washers and dryers, electrical systems, plumbing systems, kitchen appliances, etc. Many home warranty companies allow you to customize your home warranty coverage by choosing which systems and appliances you would like coverage for. How much does a home warranty cost? The average home warranty costs between $350 - $600 per year, depending on the type of coverage you choose. Basic coverage is at the lower end of the range, while more extensive coverage is at the higher end of the range. If you can afford the upfront cost of the home warranty as well as the possible additional service fees, a home warranty is most likely worth it for you. Even though you have to pay a yearly cost for a home warranty as well as additional service fees, this is still likely to be significantly cheaper than fixing your systems and appliances out of pocket. How much do home warranty service fees cost? The average home warranty service fee ranges from $50 - $100. Do home warranties require a home inspection? Usually, home warranties do not require a home inspection. Many home warranty companies advertise no home inspection to make the process simpler for the customer. However, some home warranty contracts state that preexisting conditions for your systems and appliances aren’t covered. Without showing your home warranty company the condition of your systems and appliances at the time of the purchase agreement, your claims could go unapproved. Consider doing some kind of inspection with your home warranty company to ensure you both know the condition of your systems and appliances at the time of purchase. Is a home warranty worth it? The answer depends on numerous factors: What experienced home warranty customers have to say The reputation of home warranty companies in your area The age of your systems and appliances Your ability and inclination to do home repairs yourself Your desire for peace of mind Your budget What experienced home warranty customers have to say Ask for a home warranty when closing on a house Realtor Patricia Vosburgh advises all her clients to include a home warranty with the closing deal. She explains doing this helps with the sell and also ensures the homeowner has coverage in case anything breaks after purchase. Vosburgh mentions that costly repairs such as an air conditioning system can be upwards of $3,000, so the cost of a home warranty is worth the initial cost. If you’re in the process of buying a home, see if the seller can throw in a home warranty as part of the closing deal. Find a reputable company As a home inspector, Michael Marlow has significant experience with home warranties and has had a home warranty for every house he has owned since 2000. Unfortunately, Marlow found out the hard way that not all home warranty companies deserve your business:We purchased a new construction home in 2003, and about 18 months later (right after the builder’s warranty expired), we started having problems with the HVAC just quitting… Over the course of the next four years, we had the home warranty company send out a tech for the same problem, paying a service call each time, and they repaired it. Mind you it was a different company each time. When the system finally died in 2008, we called them again, and their service technician reported that the system had been so modified by previous technicians that the system could no longer be repaired. The solution the home warranty company provided me was to give me cash in lieu of repairs, so they gave me $700. It ended up costing me $7,000 to have the system replaced.Marlow also reports hearing from past clients that some home warranty companies have claimed preexisting conditions on claims when his inspection report clearly notes that the system was working at the time of the inspection.Fortunately, Marlow switched home warranty services and now has a more trustworthy home warranty company. If his home inspection says a system or appliance was working at the time of inspection, the home warranty company will not deem it a preexisting condition. He also doesn’t have to worry about the home warranty company refusing to service a system because of previous attempts. If you find the right home warranty company, you don’t have to worry about dishonest business practices and a company ripping you off. Read the fine print To avoid any miscommunication between you and your home warranty company, Marlow advises “Read the fine print. Don’t just go by the flyer or your realtor’s recommendation; Get a copy of the full policy and read what is covered and what is not covered.” Morgan St. James, an author and home warranty customer, notes that a home warranty can definitely be worth it, but there are some things to look out for — and reading the fine print is one of them. "In my opinion, a home warranty is worth it if you have researched what the particular company covers. I’ve maintained one on my home since it was new (18 years). The main advantage is that it is a hedge against unexpected expenses, but only if your particular warranty covers the item that has gone kaput. "My first company replaced a water heater (expensive repair), repaired my air conditioning compressors and thermostats, replaced a valve in the tub of one of my bathrooms, fixed my built-in microwave, worked on a refrigerator repair, and miscellaneous other items. Well worth it, right? However, after 12 years, they changed their exclusions and, of course, the previously covered item I called about was now excluded as well as several other items." To avoid this, "If your policy automatically renews, check any changes in exclusions for the coming year." Look at home warranty reviews Real estate expert, Benjamin Ross, notes a similar problem to Marlow. "Some home warranty companies will go to great lengths to repair before they replace a part or unit. They will repair even if the best option is to replace them. This can be very frustrating for the homeowner. Scheduling multiple appointments for the same problem with no end in sight can be very frustrating and inconvenient." Like any industry, not all home warranty companies are trustworthy. Reading online reviews can help you avoid situations like Marlow’s and Ross's. The common theme in customer reviews seems to be home warranties are worth it if you find a trustworthy company that will not take advantage of you. Make sure the company you choose has trustworthy sales tactics and that they don't try to cheat you out of replacements based on contractural issues or a claim of pre-existing conditions. Even having home warranty issues in the past, Ross still says that home warranties are worth it. "I have used them for years and saved thousands of dollars. Just be sure you understand the ins and outs of the agreement." James has similar thoughts to Ross. "Read what their customers have to say about [the home warranty company]. There will always be negatives on any company, but what is the percentage of good to bad and what was the experience of the customers with a low rating? Ask home warranty companies if they're licensed in your state David Moreno and Benjamin Joseph, founders of Liberty Home Guard, explain that an important part of vetting home warranty companies is to ask them if they're licensed. "It is of the utmost importance to homeowners that entities are licensed in the states in which they operate. Even if a consumer lives in an unregulated state (like Maryland), he/she should still ask the company if they service regulated states (like California, Arizona, and/or Texas). If the home warranty company says yes, then the consumer should do his/her due diligence to verify this information by asking for the company’s license number, or just by searching the particular state’s database. This is a great way to tell whether the company is being forthright with you or not." Look into the claims department Moreno and Joseph also note that the claim process can make or break a positive home warranty experience. "Consumers should call a company’s claims line to see how the people on the claims team (that is, the department actually servicing customers) interact with them. Are the claims personnel willing to talk and answer questions? Do they answer questions quickly and in a professional manner? Are they effective communicators and the type of people you would want behind you? "Of course, it's always important to read the contents of the policy, but frankly and unfortunately, there are too many providers out there who promise the world in a policy and then don't deliver. As an example, if an AC unit has a refrigerant leak, that's virtually always irreparable. However, many home warranty companies that promise the world in their policy opt for the very short-term and damaging repair job of pumping the system full of more refrigerant, which is bad for the system, bad for your home, and bad for the environment. "By opting for this quick-fix, these companies are potentially exposing your household to harmful chemicals. At Liberty Home Guard, for these types of breakdowns, it is standard procedure to replace the unit, and we don't shy away from such replacements. In other words, we don't apply short-term fixes to long-term problems, and we don't promise the world with no intention of delivering." Take into account the age of your systems and appliances Real estate agent and homeowner Ian Bush advises “when deciding if you are going to purchase a home warranty, I think you have to consider the age of the appliances in your home, their typical lifespan, and whether or not you can afford to fix or replace them when they fail.”Bush has lived in his home for 18 years, so many of his appliances are at the end of their life. He purchased a home warranty to reduce the cost of the repairs and replacements when they fail. Bush notes that because most home warranty policies include three tries to repair followed by a replacement, it is a relatively inexpensive way to protect your systems and appliances. Having older appliances makes a home warranty worth the investment, and Bush ended up saving significant money and time in the long run. Ben Mizes, a licensed realtor and CEO of Clever, agrees that you need to take into account the age of your appliances. "Home warranties are a great option for homeowners who might not be able to afford large and unpredictable repairs or homeowners who own old homes that will need many repairs. A typical home warranty costs between $300-$700 annually and will cover major appliances and systems, although warranties usually won't cover pre-existing conditions or problems that are caused by a lack of maintenance." We discuss his last point of lack of maintenance in the next section. However, if you have a newer home and your systems and appliances are in good shape, you may consider holding off on a home warranty. Melanie Hartmann, owner and CEO of Creo Home Solutions, has advice for those in this situation: "if you have time left before the bulk of your systems will need to be replaced, it may be more cost effective to set the money you'd pay for a home warranty aside in a high return savings account. This way, you have access to the funds when they are needed and can choose the company you want to fix or replace the system. Additionally, depending on the account that is set up, you'll also earn interest on the money that is set aside. Hartmann does note that "this will only work for those who can set the account up and only draw money from it when needed." If you can't guarantee that money for home repairs, "it may be best to purchase a home warranty from a reputable company so that there is no temptation to spend those funds on something else." To help you determine the age of your systems and appliances, check out the infographic below that shows the average lifespan of systems and appliances and their average replacement costs. Infographic from Landmark Home Warranty, the #2 rated home warranty company on BestCompany.com as of December 2019. Practice proper maintenance on systems and appliances Andrew Helling, a Nebraska-licensed real estate agent and the owner of REthority.com, advises everyone who has a home warranty to complete proper maintence on covered systems and appliances or else home warranty companies can deny coverage. Helling explains why: "Home warranty companies exclude appliance or system failures due to improper installation or maintenance. For example, furnace filters should be changed at least every 6 months to avoid HVAC damage. If the filters are not changed and the system fails, the home warranty company will not cover the damage because the system was not properly maintained." If you opt for a home warranty and pay all of this money upfront, you don't want to be denied coverage just because you weren't properly installing or maintaining your systems or appliances. We suggest keeping a list of all necessary maintenece work and completing it regularly as well as ensuring the installation of all systems in your home is done correctly and efficiently. Use home warranties for your peace of mind When asked if her home warranty is worth it, homeowner Carol Gee didn’t hesitate to say “yes.” Gee first had a home warranty as part of a closing gift from the seller of her current home. At first, Gee and her husband did not use the home warranty, and they wondered if they really needed the $350 yearly expense. Two weeks before the end of her home warranty agreement, Gee walked into her laundry room only to be greeted by several feet of water — her water heater had died. Gee’s husband called the home warranty company to explain what happened and by the following day the technician had installed a new water heater and hauled the broken one away. Since then, the Gees have used their home warranty for their air conditioning system, furnace, oven, and garbage disposal.Now that they know how helpful a home warranty can be, the Gees don’t want to be without it, especially now that they are retired and don’t want to worry about unexpected repair costs. Gee happily recommends home warranties to everyone she knows. Gee sums up her home warranty experience by explaining that home warranties are like life insurance and car insurance: you hope you never have to use them but you are so glad you have them when something goes wrong. A home warranty gives you peace of mind that you won’t be left scrambling when a major system or appliance breaks. We also spoke with Becky Beach, designer and blogger for MomBeach.com, who told us that she's had a home warranty for years and it not only gives her peace of mind every year, but it also saves her a great deal of money. "The home warranty company that I have is American Home Shield and have had it for 5 years. It has saved us so much money! Our A/C went out during the Summer in both units, upstairs and downstairs, so our home warranty company covered most of the cost. I can't imagine what we would have to pay out of pocket. "The plan covers all of our appliances too like the fridge, washer and dryer, and dishwasher. We had a problem with our fridge's ice maker so called the home warranty to get a technician out there." However, Beach notes that even though a home warranty is great for saving your money on repairs, you often have to pay a small chunk in repair fees. "Every time a technician comes out, it costs us $70. That's a complaint I have because in the case of our A/C going out, they had two different technicians from two different companies service our top floor and bottom floor units. That was a big headache! I wished they would have had both units be serviced by the same company." So if you are interested in a home warranty, be prepared to pay the required service fee for every visit. And if you want the technician to be from the actual company, ensure the home warranty company you select doesn't outsource its work to third-party technicians. Use home warranties for systems and appliances you can’t or don’t want to fix yourself Like many homeowners, Debi Goldben is handy when it comes to minor home repairs. However, there are costly and difficult repairs that she does not want to do herself. With major systems and appliances that are difficult to fix, Goldben feels a home warranty is “worth its weight in gold.” Since having a home warranty, Goldben has had numerous major systems and appliances fixed and replaced, saving her at least $3,000.A home warranty is a great resource because it can take care of all the major fixes you can’t or don’t want to do yourself. Many home warranty companies even offer customizable coverage that allows you to choose the systems you want covered, which ensures you are only paying for the coverage you want. Ask for a home warranty when closing on a home Often times, you can receive a home warranty as a closing gift from the sellers of the home you're buying. Then, you don't have to pay the annual fee and you only have to worry about service fee costs. Connie Heintz, with the company DIYoffer, did just that and she's grateful that she did. "When I purchased my second home, I asked the seller to include a one-year warranty in the price of the house. I figured that by taking responsibility for the cost of the warranty, they’d be more incentivized to make repairs before I moved in. Luckily they were happy to oblige, as there was a major plumbing failure a few months after I bought the property. If I hadn’t done that, I would’ve been stuck with a hefty bill." Heintz makes a great point that if sellers include a home warranty as part of the transaction, they'll be more incentivized to make system and appliance repairs before you move in. And from the seller's point of view, incentiving a home warranty with the sell of your property will likely encourage someone to buy. Anything that makes your offer stand out above the rest is worth it. Be selective about the home warranty plan you select Many consumers opt for basic home warranty packages thinking it will cover most home repairs and are disappointed when they come across a more complex system or appliance issue and their home warranty doesn't cover it. Home warranty packages are not one size fits all, so you need to make sure the plan you're getting covers everything you need it to. To help with this, Melissa Zavala, a Broker of Broadpoint Properties, suggests the following: "It is important to take time to check what is covered and add additional coverages before purchasing. As an example, plumbing from the main to the home is often not covered unless you pay for the extra option. So, spending a few minutes looking that over and considering the benefits of the add-ons can be a good idea." Zavala notes that this is when home warranties can still be a valuable purchase. "When used properly, it can save you big bucks on roof issues, hot water heaters, dishwasher and oven issues among others. Most newer model ovens have a computer microchip that provides the digital display and wears over time and is very costly to fix. So having a home warranty just to address that single issue can save a person hundreds of dollars, maybe even thousands depending upon the type of oven." If you do your research and get the type of coverage your home needs, a home warranty definitely has its perks. Let’s recap. A home warranty is worth it if: You received a home warranty as a closing gift You can afford the yearly cost and the possible additional service fees You have found a trustworthy home warranty company with good reviews You read the fine print and understand exactly what your home warranty entails Your systems and appliances are likely to need a repair or replacement within the year You want peace of mind knowing your home’s systems and appliances are covered in case they break or need replacing You don’t want to or can’t fix certain systems and appliances on your own Let us know what you think — Take this poll Do you think a home warranty is worth it? Yes No Created with QuizMaker
Saving for a house can be a daunting task, but is one of adulthood's most exciting milestones. You're settling down into a new home, but you're also giving up a large sum of your money in the process. So, how do you prepare for such an important purchase? The obvious thing to do is to put aside money from your income and save it for a down payment. But how can you do this without breaking the bank and becoming completely overwhelmed? Identifying unique saving techniques that will work better than or in addition to your current saving methods can be stressful. Well, that’s where we come in. We’ve done the research for you and asked financial experts, homeowners, and real estate agents what they advise potential homeowners to do when saving for a house. Here are some ideas that can help you on your journey to home sweet home: Save Expected Monthly Mortgage for a Year Jimmy Thai bought his first home a year and a half after his college graduation, and from there he purchased additional rental properties every three years. As you can see, he definitely had success with his money-saving efforts. Thai suggests, “Put away your expected monthly mortgage payment for a year to see if this discipline impacts your spending and/or lifestyle. After a year, either you have 4% toward your down payment and know how to deal with a mortgage payment, or you learn that you are not ready for a mortgage obligation.”Although Thai’s advice may take a little longer to implement into your saving routine, it is definitely worth considering. This way, you not only know if you’re ready to handle a mortgage payment, you’ll also have the experience of paying one, so you won’t be ill-prepared when you do finally own a home. Cut Back on Costly Habits Desare Kohn-Laski, broker and owner of Skye Louis Realty, shared this tip: “We all know when trying to save for a house that budgeting is essential. But what about the simple ways of saving that don’t require you to balance a checkbook every time you swipe a card? Think about that one daily or weekly purchase that probably has a less expensive option. For example, if your kryptonite is a Grande latte from Starbucks every morning, try kicking it old school for a while and making a cup of coffee at home before work. (Keurigs are lifesavers). Even if you don’t have a caffeine addiction, I’m sure there’s one weekly treat you give yourself, whether it’s eating out or Happy Hours after a stressful day at the office. Cut back on these small expenses and watch your bank grow.”Kohn-Laski’s advice is a simpler approach to saving money that could help you save money without breaking the bank. Habitual purchases such as getting a daily or weekly coffee can really add up. While cutting back and putting that money towards your house instead may seem small at first, like Kohn-Laski said, soon enough you will see your bank account start to grow. Try House Sitting Kelly Hayes-Raitt, a blogger and published author who discovered housesitting as an appealing way to save for a house, offered this unique advice: “I save money by not paying for accommodations. I house sit around the world where I live in other people's homes at no cost in exchange for caring for their pets while they go on vacation.” She adds: “Not only do I save money for my own home, but I ‘try out’ communities by house sitting. And, by living in a variety of apartments and condos, I learn what features are important to me that I'd like in my own home.”Hayes-Raitt’s advice, although unconventional, could be a great way to avoid paying certain living expenses and to “try out” communities and find out what you want in a home and neighborhood. Some people may not be able to house sit as often as she did, but if you have the time and the resources, this is certainly something to consider that could help you save money for your future house. Take Advantage of Partnering Options Keith Jenkins, an experienced real estate agent and investor, lent us some of his honest advice on how to save for a house without having to use your own money: “Really the best idea for saving for a house is not to! It is totally possible to purchase a house with none of your own money. Many people use ‘no money’ as an excuse as to why they cannot own a home. But if everyone waited until they had enough money... they probably would never ‘own’ a home. The best way to purchase property is with other people's money (OPM). Partnering on deals will help a new homeowner gain experience, and take most of the risk out of the deals.”Jenkins also gives us insight into his own experiences: “Personally I've even partnered on a deal and purchased a house with none of my own money and none of my own credit. To the truly serious, money is not an issue when it comes to becoming a real estate investor, or a first-time homeowner.”Jenkins's advice is especially something to consider when you don’t have a lot of your own money to put up but you are looking to purchase a home sooner rather than later. He reminds us there are other options even when you feel like there are none. Utilize Money-Saving Apps Chasen Nick, a Digital Marketing Strategist for RAMS Home Loans, one of Australia's largest lenders for first time home buyers, had a specific strategy when asked for his advice about saving money for a home: "My favorite way to save and manage my money is by utilizing an app called Qapital. The app gives you the ability to set up an automated savings account where you decide what triggers a deposit. It’s kind of like a game in which you make up a rule that allows you to round up your extra change each time you buy something with the card that’s connected to your Qapital account. So let’s say you create a rule that rounds your purchases up to the next $5 and you spend $7 on a purchase, then $3 will be placed into your savings account. Over the span of three months, I’ve managed to save almost $1,000 without even realizing the money was gone." Nick adds, “When you stay informed of how much money is in your account at all times, it allows you to budget differently.” Nick’s advice is a unique approach to saving money that is most likely different from what you are currently doing. It doesn’t require much money out of pocket, but it adds up with every purchase you make. Start Your Own Business Deborah Hanamura, Executive Director of Marketing & Communications for Paladino and Company, provides a more traditional route for money saving. Hanamura recently bought a house in the intense and competitive Seattle real estate market. She and her husband started from scratch when they began to save for the house and she says, “The way we saved wasn’t necessarily innovative or surprising. But essentially my husband started a side business that he could do on the weekends and evenings, and we saved every penny from it to produce a down payment in the span of about 18 months. Now that we’ve bought the house, he is continuing to do some work, but not nearly at the pace that he was when we were in saving mode.” Be Transparent about Your Goals Hanamura also explains, “I was also very transparent with people about my goals. I did not travel for weddings, holidays, etc. because it certainly didn’t make sense for him to work that hard only to spend it on airline tickets. And while we did things, like I would challenge myself not to buy any clothes for six months, and I brought my lunch to work every day, we did still remember to enjoy ourselves and take the occasional weekend getaway.” Consider Working with a Financial Planner Hanamura continues, “We also worked with a financial planner, and we established some smart guidelines about how to divide our contributions to our retirement plans so that our future financial security wouldn’t be compromised by our downpayment goals. In the end we were able to handle the down payment, closing costs, appraisal gap, and moving expenses without touching our safety net of savings.” Keep Your Eyes on the Prize Hanamura ended by saying buying a house became a reality in less than two years because she and her husband kept their eyes on the prize without becoming distracted by unnecessary expenses. Regardless of what money saving methods you are using now or decide to use, Hanamura’s experience shows us that whatever you do to save money, commitment is key. Pay off Credit Card and Other Debt First John Reinmuth, a Certified Financial Planner, suggested the first step to saving money for a house should be to “pay off any credit card or consumer debt first.” Reinmuth identifies two benefits to having a zero balance: "It improves the buyer's credit score. It reduces the percent of the buyer's income already allocated to debt servicing. Both the credit score and the total of current debt factor into the lender's willingness to underwrite a loan. The improved credit score and eliminated debt increase the likelihood of qualifying for a mortgage with less than a 20% down payment. This, in turn, reduces the money needed for the down payment. Thus, they have the same effect as increases the saving for a house down payment. While paying off these debts, the potential home buyer should avoid making credit card purchases until any continuing balances have been paid off." If you’re uncertain about how to pay off your credit card debt effectively, consider an automated debt management app such as Tally. According to personal finance expert Bethy Hardeman, “Tally helps people overcome their credit card debt by determining the smartest and fastest way to pay it down, then actually takes action for them based on this information. Tally is able to save people money in two ways - by giving them a lower interest rate and by helping them manage their payments, guaranteeing they will never pay a late fee again.” Ask Loved Ones to Match Your Savings Reinmuth has another, more creative tip for putting aside a down payment: "Ask parents to match your increased savings: Dollar for dollar, 50 cents per dollar, or some other ratio. A gift facilitates a mortgage down payment much better than a personal loan. The lender will ask for a written statement regarding whether parental participation is a gift or loan, and will add any loan amount to other debt servicing. My wife and I matched savings for my son and daughter-in-law to purchase their first house in 2000. This encouraged them to look for as many ways as possible to save, as each $1 they saved in effect became $2. At the time of our gift, we had already determined that our savings and pensions were sufficient for retirement." Reinmuth understands that “with escalating house values, saving for a down payment can feel like reaching for a target that keeps moving farther away.” And he is right. But if you find a way to save money that works for you and gets you into your dream home, that target can be something you hit with a bullseye. It just takes patience. Start a Side Hustle Jennifer Beeston, the Vice President of mortgage lending at Guaranteed Rate Mortgage, is also a financial vlogger, and she educates people on money and mortgage matters. Beeston advises this when saving for a house: "A great way for buyers to save for a home is by doing ‘side hustles.’ They stash all their ‘side hustle’ income for their down payment. A few potential side hustles are working for Uber part time, or signing up with Fiverr.com and charging for one of your skills. Local side hustle examples would be dog walking, part-time personal assistant for a busy family, meal delivery, etc. The amount of ways I have seen people make money with a few extra hours every week is astounding. If you have the will and any skill, you can make extra money." Beeston’s advice is similar to Hanamura’s in that you have to step outside of your comfort zone and take on extra jobs that may be stressful in the moment, but ultimately will make it easier for you to save money and buy the house you want. Whichever strategy you decide to go with as your money-saving method, our advice is to plan, stay committed, and don’t give up. You’ll hit that bullseye eventually, and we hope these tips get you a little closer to your target. Once you’re settled in your dream house, come back and check out the best home warranty companies so you can get the necessary protection for your home's systems and appliances.