What is a home warranty?

A home warranty is essentially a service contract designed to provide coverage for the repair or replacement of major home systems and appliances that may break down due to regular wear and tear. This can include systems such as heating, plumbing, electrical, and appliances like ovens, refrigerators, and dishwashers.

When homeowners invest in a home warranty, they gain peace of mind knowing that if a covered system fails, they can often have it repaired or replaced at a fraction of the cost of paying for those repairs out-of-pocket. Home warranties are particularly beneficial for buyers of older homes, as they often come with the risk of older systems failing.

Other options described do not capture the essence of what a home warranty entails. A legal document outlining ownership of a property refers to something like a deed, while a certificate that verifies the home’s value pertains to appraisals. An agreement between a buyer and seller for sale terms relates to a purchase agreement, which outlines conditions for the transfer of property ownership. Each of these documents serves specific purposes in real estate but does not cover the specific protective service that a home warranty offers.