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Home service contracts, or home warranties, are an important consideration in the home-buying process, especially for new homeowners.
"Homes are a major financial investment, and repairs and replacements on appliances and major systems can cost anywhere from $700 to more than $3,500," explains Tim Meenan, CEO and executive director of the Service Contract Industry Council (SCIC). "While new homeowners face numerous expenses, a home service contract can guard against these unexpected pricey repairs and replacements."
Generally, a home service contract covers repair or replacement costs of major systems or appliances that fail within the contract period-often one year. This may include coverage of the home's electrical system, HVAC unit and plumbing system. Typically, the contract can be renewed annually. Most contracts come with a nominal service fee, paid at the time of the incident.
Aside from monetary coverage, the home service contract provider will refer the buyer to a vetted contractor who can perform repair or replacement work-a boon to buyers new to an area.
Most homeowners with home service contracts call upon the contract provider two times or more each year.
The SCIC strongly recommends first-time homebuyers negotiate a home service contract before committing to a home. If you're new to home-buying, discuss your options with your real estate professional-he or she can offer counsel for your circumstances.
The peace of mind, Meenan says, is worth it.
Source: Service Contract Industry Council (SCIC)
"Homes are a major financial investment, and repairs and replacements on appliances and major systems can cost anywhere from $700 to more than $3,500," explains Tim Meenan, CEO and executive director of the Service Contract Industry Council (SCIC). "While new homeowners face numerous expenses, a home service contract can guard against these unexpected pricey repairs and replacements."
Generally, a home service contract covers repair or replacement costs of major systems or appliances that fail within the contract period-often one year. This may include coverage of the home's electrical system, HVAC unit and plumbing system. Typically, the contract can be renewed annually. Most contracts come with a nominal service fee, paid at the time of the incident.
Aside from monetary coverage, the home service contract provider will refer the buyer to a vetted contractor who can perform repair or replacement work-a boon to buyers new to an area.
Most homeowners with home service contracts call upon the contract provider two times or more each year.
The SCIC strongly recommends first-time homebuyers negotiate a home service contract before committing to a home. If you're new to home-buying, discuss your options with your real estate professional-he or she can offer counsel for your circumstances.
The peace of mind, Meenan says, is worth it.
Source: Service Contract Industry Council (SCIC)
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