If you are anything like me- you never opt for the "extended protection" for your purchases, because you know that it is usually a waste of money. It always happens that when I have something that breaks I am just out of my warranty period even if I have begrudgingly bought the extended one.
I feel differently about home warranties though.
Tradition usually dictates who pays for the home warranty, which start around $350 for the first year. In the Modesto area the seller typically pays for the warranty but often times on bank owned properties and short sales the seller will not contribute for one. It is your option as the buyer though to purchase one yourself. "An extra $350+ on my closing costs?" you say, but it could end up saving you lots of money.
Here is an example:
Yesterday I received a frantic phone call from a buyer who just closed escrow on her house last Friday. After moving in over the weekend, they realized Tuesday afternoon there was water backed up in the showers, sinks and toilets. There was wet toilet paper all over her front lawn (yuck). Undoubtedly a sewer blockage somewhere.
I was able to make a quick phone call to Old Republic Home Warranty, and within a couple hours there was a plumber at her house working on clearing the blockage- all for a $60 trade call fee- which is far cheaper (and less stressful) than paying for the entire service out of pocket after having just gone through the expense of closing on your first house and moving.
This is just a small example, but I have had clients use their home warranty for heater and air conditioner repairs, new dishwashers and even new pool equipment. They really do pay for themselves even if you have to pay for the warranty yourself. Just remember- spending a little money now can save you thousands later.
