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Front Page - Friday, July 28, 2017

Do you need a home warranty when buying a house?

In the home-buying process, the question of a warranty and what’s covered often comes up. This week, I’ll examine key points you might want to consider.

Even when you purchase a newly built home, things can go wrong. Therefore, a builder’s warranty is often requested. A builder might back the warranty themselves or they might purchase a warranty from a third-party company that assumes responsibility for specific types of claims as they arise.

Depending on your loan type and local ordinances, a lender might require builders to purchase a third-party warranty to protect buyers of newly built homes, so investigate this with your lender at the beginning of the home buying process.

A variety of third-party companies provide home warranties on resell homes, as well. They are generally one-year in duration and can be renewed annually after this period. Typical items that are covered include built-in kitchen appliances, hot water heaters, heating and air systems, and plumbing and electrical systems.

There might be opportunities to upgrade and add pool equipment, refrigerators, septic tanks and limited roof repair. Here again, understanding what’s covered and any related deductible as part of a claim are key to avoid disappointments and misunderstandings.

In some cases, sellers will offer a home warranty as part of the original listing. This warranty offer can act as an incentive to home buyers and are particularly effective if some of the covered systems are older and approaching the end of their functional life span. It might be easier for buyers to accept a home when they feel protected from major replacement or repair expenses for the first year.

Regardless of whether you need a new construction or resell home warranty, the key questions to ask are:

-- What is and is not covered?

-- What’s the process for filing a claim and the timeline for doing so?

-- How are claim disputes handled?

-- What’s the extend of the home owner’s liability should a claim arise?

You might also want to ask to see previous home owner’s reviews or check on-line portals for ratings vendors have received from other home owners.

An experienced and educated member of the Greater Chattanooga Association of Realtors can be an excellent resource to help you navigate home warranty selection and claims process.

The Greater Chattanooga Association of Realtors is The Voice of Real Estate in Greater Chattanooga. The association is a regional organization with more than 1,800 members and is one of more than 1,400 local boards and associations of Realtors nationwide that comprise the National Association of Realtors. GCAR services Hamilton and Sequatchie counties in southeast Tennessee and Catoosa, Dade and Walker counties in northwest Georgia. Go to www.GCAR.net for more information.