Sacramento Real Estate Views

Home Warranty or No Home Warranty?

Are You Feeling Handy? Well Are You, PUNK!

I got an email from a past client of mine who just had a zone controller go out on a dual zone air conditioning system in his home.  They just closed in June.

The failure, while a pain, doesn’t keep the cooling system from functioning but just means that the entire house will be cooled when the system is turned on rather than just a specific zone of the home.

At the end of the transaction, I split the home warranty with my buyers as thank you for their business.  I have been a proponent of home warranties throughout my career but anymore, I don’t know if purchasing a home warranty is a good idea.  At least from the sense of that it’s “always required”.

When the controller failed, they called the home warranty company and told them they had an issue with their a/c and could someone come out to fix it.

When the guy got there, which cost them a $55 service call, he told them the part wasn’t covered and that it would cost them $600 to replace.  The part wasn’t covered?  Why did we bother getting the central heat and a/c covered at all?  What does it cover, duct work?

What home warranty companies seem to do is cover items that have the lowest possibility of failing.  Sound familiar?  Sounds like most insurance companies.

The fact is that they really don’t want to pay if something goes wrong with your home.  They don’t.  Home insurance companies are no different.  Submit a claim and see your rates go through the roof.

I called a friend of mine who works on a/c and heating systems.  Paul Burke is his name is he’s the best I’ve ever run into.  Great work for the best prices.  He quoted me a price of $385 installed to have the system.  That’s a $270 savings and he wouldn’t have charged for the  “service call” if he did the work.

So…Warranty, No Warranty?

I can’t ethically advise anyone against a home warranty.  I will say this, going forward, I will educate my clients about home warranties, what they cover and whether or not it makes sense for that client.

I had a home warranty when I purchased my home.  I never used it as I tend to fix things myself.  I didn’t have any problems with what they covered so I never had a reason to call them.

This is just what First American Home Warranty Buyers Protection Corporation was hoping would happen with my buyers.

If you’re purchasing an older home where the components haven’t been updated then I think a home warranty could be a good thing.  If you’re buying a home that is less than 10 years old or a home where it’s clear there has been no deferred maintenance, then it’s probably safe to pass on a 1 year home warranty WITH a comprehensive home inspection of all components.

Get a very comprehensive home inspection.  This is something I always recommend.  A comprehensive home inspection is, in my opinion, the most important thing you can do when buying a home.

Have all the components of the home tested by a general contractor/home inspector, a heating and a/c contractor, a pool/spa guy, if that applies, and then review the reports.

If you feel confident in the fact that all components are in good working order, I think, if it were me, I wouldn’t buy a home warranty on a home that was less than 10 years old.  Many homes in the Rocklin/Roseville real estate markets fit this description.

Please understand that this is what I’d do for me and not a recommendation that I’d give anyone else.  I’ve seen too many of my clients experience difficulty with home warranties.

If you are considering purchasing a home warranty, don’t treat it as a mandatory requirement and be absolutely clear on what they cover and what they don’t cover.  If you’re working with me, I’ll go over EXACTLY what they cover and what they don’t.

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Tags: granite bay, homes rocklin, Lincoln, Roseville

Total Number of Homes for Sales Continues to Rise

Percentage of Short Sales Increasing

The total number of single family homes for sale is continuing to increase for the 8th month in a row.

There are, as of this writing, 7883 home on the market in the 3 county area of Placer, Sacramento and El Dorado.

Getting short sales approved has become easier and many more people are choosing to sell their distressed home short in the Sacramento, Rocklin and Roseville real estate markets.

The increase in the total number of homes for sale is bound to get worse as we enter the slower selling fall months.

Homes just aren’t selling as fast and as the number of available homes for sale continues to climb, values must be affected adversely, again.  Simple supply and demand.

Short Sales By City

The percentage of homes in short sale has increased.  Currently, short sales in occupy 30% of the homes for sale in the 3 county area.

Individual cities in Placer county have much higher percentages.

In this report, Rocklin leads the pack at 39% of the available homes for sale being  in short sale.  Next is Lincoln and Sacramento at 35%, Roseville at 33% and Granite Bay at 14%.

I think timing is at play in Rocklin with the bulk of new construction being completed in the 2001 to 2003 time frame when the market was going up very fast.

The point here is that more and more homeowners in distress are choosing the short sale route as it is much easier process than it used to be and the credit ramifications, especially for purchase money loans, are less severe.

Are you considering selling your home short?  For more information on short sales, click here.  Additionally, if you’d like a no obligation, confidential consultation, please fill out the form below and we’ll be in contact with you promptly.

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Tags: granite bay, Lincoln, Rocklin, Roseville, sacramento, short sale