Protecting Your Home Investment
There are a variety of things to consider when compiling a wish list before going home shopping. For many Homebuyers, the peace of mind that comes with a warranty in the purchase of a new construction home may be every bit as alluring as the excellence of the local schools. On the other hand, for those who have found a resale home that checks all the boxes on their wish list, they may want to ask themselves if a leap of faith now will be worth some potentially costly repairs in the future.
Get a Guarantee
One of the most compelling arguments for the construction and purchase of a new home is that it often comes with a warranty. That does not mean you won’t run into the occasional hiccup, but a good warranty offers an added layer of protection that any issues found within an allotted time following purchase will be corrected by the builder. You can also rest assured that your new home’s construction, electrical wiring and plumbing are all up to code, and that all appliances, the HVAC unit and water heater are brand new.
In contrast, with an older resale purchase, it’s a good idea to partner with a certified home inspector to ensure you’re making a wise investment. Apart from any HVAC upgrades or roof replacements that typically come with a guarantee, it’s rare for a Homebuyer warranty to accompany a resale. If you buy a resale, take a close look at anything found during the inspection that may be in question. For instance, replacing a water heater that’s every bit as old as the house might be something to negotiate with the seller. Bear in mind that even the best inspectors can’t predict the future to foresee potential problems down the road.
Builder Warranty vs. Resale Home Warranty Contracts
Not all builders are cut from the same cloth, and that means warranties may vary from one builder to the next. Some new home builders may not offer warranties at all, so it’s important to do your homework. David Weekley Homes provides an industry-leading, multi-level warranty on every home we build. It includes a two-year mechanical systems warranty covering plumbing, electrical, central air conditioning and heating systems, along with a 10-year warranty against major structural damage, including foundation, structural columns and load-bearing walls. We even take it one step further by offering a limited warranty to cover defects in workmanship and materials for the first year you’re in your home. Add to that any appliance manufacturers’ warranties, and that’s a good deal.
However, if you’ve found the home of your dreams in a resale, you may want to consider investing in a home warranty service contract. That puts the onus on you to not only research the best contracts, but to also pay for it – unless you negotiate for the seller to cover the cost. Renewable for one-year terms, it could be a wise investment, particularly depending on the age of the home. The Service Contract Industry Council indicates that, on average, contract holders utilize their home service contracts more than two times every year. Bear in mind that you may have to pay a small fee for repair visits and you’ll also have to cover the cost of each year’s renewal fee (averaging anywhere from $300-$900, depending on the plan). Keep in mind that without a home service contract, the full cost of all repairs will rest squarely on your shoulders.
Knowledge is Power
Depending on where you buy and the age of the home, you may not know who the builder of your resale is, or they may no longer be active. This can make it more difficult to have a clear understanding regarding the quality of craftsmanship and materials used.
In contrast, a new construction home offers the unique advantage to do your research so that you work with a reputable builder with many years (and awards) under their toolbelt. Look to reviews, and judge for yourself based on the interactions other buyers have had with the building and sales teams. You’ll also want to consider the appeal of having a warranty and learn about the company’s building standards.
Learning more about some of the differences regarding a new home warranty and home service contract will ensure you are equipped to compare the options of a new home and resale purchase when you are house hunting for you and your family.