Unveiling Home Warranties: Exploring Potential Pitfalls in Real Estate


Home warranties are often presented as a safeguard for buyers and sellers in real estate transactions. These service contracts promise to cover repair or replacement costs for certain home systems and appliances. While home warranties can provide peace of mind, it is crucial for buyers, sellers, and real estate agents to be aware of their potential pitfalls. In this blog post, we will explore the concept of home warranties and shed light on some of the common challenges associated with them.

Understanding Home Warranties:
A home warranty is a service contract that provides coverage for the repair or replacement of specific systems or appliances within a home. Buyers or sellers typically purchase these warranties as an added layer of protection during the real estate transaction process.

Limited Coverage:
One of the primary pitfalls of home warranties is their limited coverage. Home warranty plans often come with various exclusions and limitations, which can result in denied claims for certain items or specific types of damage. It is crucial to review the terms and conditions of the warranty carefully to understand what is covered and what is not.

Pre-Existing Conditions:
Home warranties often exclude coverage for pre-existing conditions or known issues. This means that if a problem existed before the warranty was purchased, it may not be covered. Buyers should conduct thorough inspections and assessments of the property to identify any existing issues before relying solely on a home warranty.

Service Call Fees and Deductibles:
Most home warranty plans require homeowners to pay a service call fee or deductible when filing a claim. These fees can range from $50 to $100 or more for each service request. While the warranty may cover the majority of the repair or replacement costs, these additional fees can add up over time.

Limited Contractor Options:
Home warranty companies often have a network of preferred contractors they work with. This limited pool of service providers may not always meet the homeowner’s expectations or have the necessary expertise to address specific issues. Homeowners may be restricted in their choice of contractors, potentially leading to delays or unsatisfactory repairs.

Renewal Costs and Fine Print:
Home warranty plans typically have renewal costs that increase over time. It is essential to review the terms and conditions, including any renewal provisions or changes in coverage, before committing to a long-term warranty. Carefully consider the value and cost-effectiveness of renewing the warranty each year.

Claims Process and Customer Service:
Some homeowners have reported frustration with the claims process and customer service provided by home warranty companies. Delays in claim approvals, disputes over coverage, or difficulties in reaching customer service representatives can be common complaints. Researching the reputation and customer reviews of the warranty provider can help gauge their reliability and responsiveness.


While home warranties can offer peace of mind during a real estate transaction, it is crucial to understand their limitations and potential pitfalls. Buyers, sellers, and real estate agents should carefully review the terms and conditions, assess the coverage limitations, and consider the long-term costs before relying solely on a home warranty. Additionally, maintaining a proactive approach to property maintenance, conducting thorough inspections, and considering alternative options for home protection can help mitigate some of the risks associated with home warranties. By being informed and making well-informed decisions, homeowners can navigate the realm of home warranties more effectively and ensure their investments and properties are adequately protected.