Home Inspection vs. Home Warranty

I picked up a home warranty brochure and read it. I was really surprised at what isn't covered. Other than plumbing and electrical, none of the main systems are covered. You can buy extra coverage for the heating and cooling system, but that's it for systems. Everything else is specific appliances, and you have to pay extra to cover some of those too (like the refrigerator, washer, or  dryer). Of the six appliances that are covered by the standard warranty I saw, one costs a lot less than the warranty (garbage disposal) and two of the other five are not common here (trash compactor and built-in microwave). 

   And by the way, if any of the covered systems or appliances happen to create a lot of "secondary" damage when they bite the dust, that's not covered. So if the ancient water heater (which no one looked at) finally ruptures while you and the family are out to dinner and all of the floor coverings are ruined....sorry; they'll only pay for the water heater. If your main electrical panel had wiring problems and it fried your entire computer set-up; well, sorry. Maybe your homeowners insurance will catch it....maybe. But it's certain the homeowner's insurance won't pay for the roof if it's worn out, or the foundation if it needs work, or any other pre-existing problems related to wear & tear, or lack of maintenance....and neither will the home warranty. 

   But to me, the biggest difference here is that without an inspection you won't even know about the worn out roof or the shifting foundation until after you've closed the deal. That's after you've signed closing papers saying that you accept the property "as is" and hold everyone else in the deal "harmless" for the future. Isn't it far better to know all beforehand? Isn't it far better to negotiate with a motivated seller than a giant insurance company or two, and their army of lawyers? And if it turns out that the house is a disaster just looking for someone to happen to, you can walk away with your earnest money (usually, but read your contract offer for details). If all you have is a home warranty, you'll have to tough it out, or try to sell and start all over again.

   If you are thinking of purchasing a home warranty yourself, think twice. My quality home inspection typically costs around $350* and will definitely help you now, if only to know exactly what you're buying. The standard warranty costs $399 and may or may not help you later. Let's face it, if it were likely to be a good deal for you, the insurance company wouldn't offer it. 

   If the seller is offering a home warranty, take it; it can't hurt. But insist on a top-notch home inspection for yourself and your own peace of mind. Give yourself all the options, as well as the maximum amount of information to guide you towards making the best choices. Foresight is far better than hindsight. 

   (*Prices vary with size; most fall into this range. See "My Fees" at the left side menu for more details.)