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Home Warranties – To Buy or Not to Buy

January 20, 2012

Home warranty contracts are growing in popularity these days.  Even though they are an added expense, they alleviate the possibility of incurring a greater expense during the buyer’s first year of home ownership.

A home warranty usually covers major operating systems and appliances for one year, such as plumbing, heating and electrical systems, and most large appliances.  The one-time fee for a year’s coverage is paid up-front at the closing of the home purchase, while additional one year terms can be subsequently purchased if desired by the owners. The initial fee is usually paid by the seller and considered a good investment, as it’s an added appeal to prospective buyers.

When shopping for a home warranty plan, check with several companies that serve your local area.  Fees and coverage vary significantly from state to state.  Be sure to read the fine print in the contract — there may be notable exclusions that make the contract less valuable.

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