Whenever we make a major purchase, we expect the sellers to stand behind their product. That’s why everything from a car to a microwave oven comes with a warranty, to guarantee that if something goes wrong after the purchase, it will be fixed.

That’s exactly what a home warranty is for. It protects the new homeowner against any unforeseen and expensive repair bills in the first year after buying.

Often the seller offers the warranty as part of the sales contract. It covers major components such as heating and air conditioning, roof, foundation or plumbing system for a year after the closing. If something significant goes wrong during that time, the new owner can get repairs made after paying a small service fee, usually around $60 to $100. If the seller doesn’t provide a warranty, the buyer can obtain one.

Either way, the cost is minimal, just a few hundred dollars.

There are some variations in warranties. Some have a lower up-front cost, but require a higher service fee if repairs are needed. The reverse, with lower fees for service calls, may be the better choice for an older house, which has a higher likelihood of needing repairs.

It’s important to understand, though, that a warranty is no substitute for a thorough home inspection before buying. For example, an older house might have an outdated heating and air conditioning system, which an inspection would reveal. It would be better to arrange to have the seller replace it before the sale, or to account for its condition through a reduced sale price. A warranty may not cover the cost of upgrading that obsolete system to a new, energy-efficient heat pump.

But there’s no question that a warranty is a good deal for a buyer. That’s especially true if finances are tight and there’s no emergency fund to pay for major repairs.

Think of most housing purchases as like buying a used car. It looks great, but it’s past the manufacturer’s warranty period. Everything in the house is a used item, and there’s no guarantee it will work properly. The warranty helps to fill that gap.

It’s different with a brand-new house, of course. The buyer is protected by the builder and by the manufacturers of the heating system and appliances. Even if a homebuilder doesn’t offer an explicit warranty, new construction is covered by an implied warranty under North Carolina law.

Your real estate agent can refer you to a reputable warranty company. When evaluating a warranty, you should read the fine print so you understand what’s covered and what the dollar limits are for various kinds of repairs. Repairs under a home warranty will be provided by contractors the company specifies.

Keep in mind that warranties don’t cover minor, and normal, issues like gaps caused by settling. The sorts of things that can be fixed with a little caulking or paint aren’t addressed by a home warranty. Think of this as being similar to the deductibles in your auto insurance policies. You pay for little things; the warranty covers the big ones.

What I hear from my clients is that those who get warranties are very happy with that decision. It’s not very expensive at all, compared to the potential cost of repairs.

Have a question about buying, selling or any other real estate matter? Let me know and I’ll address it in a future article.

Michelle Clark is a broker with Intracoastal Realty, based at the Wrightsville Beach office. She is an Accredited Luxury Home Specialist, ALHS and also a Short Sales and Foreclosure Resource. Whether you are buying, selling, or investing, know that Michelle and her team will go the extra mile for you. To learn more about Michelle and Intracoastal, go to www.intracoastalrealty.com. You may contact Michelle at [email protected] or 910-367-9767. Like Michelle’s team on Facebook at www.facebook.com/MichelleClarkTeam.