Are Home Warranties Worth It for Older Homes?

October 16th, 2023  / Author: Cesar Gomez

When you own an older home, it's no secret that maintenance and repairs are an inevitable part of homeownership. Older homes often come with charming character, but they may also bring older appliances, electrical systems, and plumbing more prone to breakdowns.

In such cases, homeowners often find themselves debating whether to invest in a home warranty to offset the costs of potential repairs and replacements. In this article, we'll explore whether home warranties are worth it for older homes and the key factors to consider.

What is a Home Warranty?

A home warranty is a service contract that covers the repair or replacement of major home systems and appliances. These contracts typically last for a set period, often a year, and they can be renewed annually. Home warranties can be a valuable addition to your financial planning, offering protection against unexpected repair costs.

Water heaters, electrical systems, air conditioning units, and major appliances in older homes are frequently more prone to breaks due to usual wear and tear. Home warranty plans can provide coverage for these items, making it a more affordable option for homeowners to address unforeseen repairs.

handsome man fixing boiler or water heater

How Do Home Warranties Work?

If appliances like your furnace or dishwasher suddenly stop working due to normal wear and tear, you call your home warranty provider. They'll send a local expert, often a repairperson or technician, to your doorstep to figure out what's going on.

You'll pay a service fee, which is a reasonable upfront cost for the visit. Once the technician identifies the issue, they'll either repair the item or replace it, all in line with your warranty's terms and conditions. You won't have to dig deep into your pockets for those surprise repair bills.

Pros of Home Warranties

Home warranties offer several advantages for homeowners, such as:

  • Protection Against Unexpected Repair Costs: The primary benefit of a home warranty is that it shields you from the sudden and potentially expensive pocket costs of repairing or replacing major components.
  • Predictable Service Fees: The service fee, while an out-of-pocket expense, is typically fixed and predictable, unlike the variable costs of unexpected repairs.
  • Additional Coverage Options: Some warranty providers offer add-on coverage, which is excellent for older homes with high-end items. These additional coverage options can extend the protection plan to cover items like a guest house or high-end appliances.
  • Peace of Mind: Home warranties provide homeowners with peace of mind, knowing they have financial coverage in case of unforeseen breakdowns.

Cons of Home Warranties

Some potential cons of home warranties are also worth considering:

  • Annual Cost: Home warranties come with annual premiums, which can range from a few hundred to over a thousand dollars. Over time, these costs can add up.
  • Coverage Limitations: Some warranty contracts may have coverage limitations and limits per repair. It's essential to understand what is and isn't covered to avoid unexpected costs.
  • Pre-existing Conditions: Home warranties may not cover pre-existing conditions, and some issues might not be eligible for repair or replacement.

Home Warranty vs. Homeowners Insurance: What's the Difference?

It's essential to differentiate between a home warranty and homeowners insurance. Home insurance typically provides coverage for your home's structure and personal belongings in cases of damage or loss due to events like natural disasters, theft, or fire. In contrast, a home warranty deals with fixing and replacing essential systems and appliances due to regular wear and tear.

Should You Invest in a Home Warranty for Your Older Home?

The decision to invest in a home warranty for your older home should be based on your specific circumstances and preferences. If you have a tight budget and want to protect yourself from unexpected repair costs, a home warranty can be a valuable addition to your financial strategy.

Remember, regular maintenance is vital for a home warranty to work effectively. Your warranty might not cover routine breakdowns due to lack of care, so ensure your major components are well-maintained.

Tips for Getting a Home Warranty for an Older Home

To make the best choice when considering a warranty for your older home, here are some practical tips to guide you in the decision-making process:

1. Do Your Homework

When you're in the market for a home warranty for your older house, roll up your sleeves and do some good old-fashioned research. Take your time to compare different warranty plans, dig into the fine print, and understand all the nitty-gritty details like coverage limitations, service fees, and annual costs. This careful examination ensures you pick the plan that's the perfect fit for your unique needs.

2. Manufacturer's Warranty Alert

Don't forget that many appliances and systems already come with their own manufacturer warranties. It's important to know how these manufacturer warranties interact with your home warranty coverage to prevent any confusion or complications. You don't want to end up unintentionally canceling out a valid warranty.

3. Prepare for the Unexpected

A home warranty is a great safety net, but it may not catch everything. So, alongside your warranty, consider setting up an emergency fund. Life can throw curveballs, and this fund gives you the financial flexibility to handle those unexpected costs that fall outside the umbrella of your warranty coverage.

man looking at the paper bill

What if You're Selling a Home?

If you're selling your old home, a seller's home warranty is a service worth considering. It's designed to provide extra assurance to potential buyers. This warranty typically covers essential systems and appliances in the home during the escrow process and for up to a year after the sale.

It acts as an enticing bonus for buyers, giving them added confidence in the property they're considering. In the real estate world, seller's home warranties streamline transactions and ease buyer concerns regarding unexpected repairs, making the whole process smoother.

It's also worth mentioning that some home warranties can be transferred from the seller to the buyer when a property changes ownership. This is appealing to buyers as it expands the coverage.

Simplify Selling Your Older Home As-Is

So, are home warranties worth it for older homes? Yes, because home warranties provide a financial safety net against the unexpected expenses of major system and appliance repairs. And if you're selling your home, a warranty can serve as an incentive for buyers, providing them peace of mind when it comes to dealing with repairs.

If you want to avoid the hassle of getting the warranty or making any repairs in your home, think about selling it to SleeveUp Homes. We'll purchase your property as-is and offer you a top-dollar deal, assuring you get the full value of your home in cash. To get an idea of what you could receive, all you have to do is request a no-obligation cash offer. After that, you can confidently make your decision.



If you want to sell fast and are worried about how long the traditional process takes, and the commission and fees involved, consider working with SleeveUp Homes.