Gotcha Guide™: Green-ify Your Home Service Contract

NOTE: This article is part of the forthcoming book, the Gotcha Guide™ to Buying or Investing in Real Estate. by DeeinAustin™

I was elated to see the Home Warranty of America (HWA) announcement of their GreenPlus Program earlier this year.

GreenPlus is an upgrade to HWA's 13-month contract, which covers appliance and mechanical systems. GreenPlus makes Energy Star exchanges, replaces your water heater with a tankless version, and upgrades your heating system to 90% efficiency upon disrepair.

This is especially useful in Green cities like in Austin, where our mayor is preparing to roll out a Climate Protection Plan, requiring all Austin home owners to make green upgrades before they can sell their home.

The Dark Downside of Home Service Contracts

Like all good things, there's a downside. Here are the Top 5 Complaints I hear about home service contracts:

• The repair companies try to avoid paying for a full replacement.
• The contractors are sometimes rude to you and/or your tenants. They're not trained in customer service.
• Like most insurance, costs increase each year, including the annual fee and deductible.
• If nothing breaks, you may feel you wasted money.
• Unlike the insurance industry, this one is not regulated with strict guidelines.

Gotcha Guide™ Tips for Home Service Contracts

Service contracts are not just for buyers. The best time to buy a service contract is during a home sale. Sellers can negotiate to pay for a home warranty for the new buyer or buy coverage during the sale period to later transfer it to the new owner.

Best Bets: Read your contract carefully to understand repair criteria and how many repairs warrant a replacement.

Also, get referrals from friends, real estate professionals, and co-workers in your area. Both my friends and I have had negative experiences with American Homeshield and First American. Service Magic was also rough, but I haven't used them for years. 

I've heard nothing but positive reviews for HWA so far.

WANT TO SAVE MORE GREEN? READ THESE RESOURCES

• 5 Quick and Easy Green Building and Remodeling Fixes.
• Austin Mayor Will Wynn's Climate Protection Plan, along with an Update.
• Texas Lawmakers Boost Green Building.
  
• Read more about Home Warranty of America (HWA) coverage.
  
• Why Home Warranties Suck.
• Use Automated Feedback to Sell Faster, for More $$!

All Rights Reserved, Copyright 2008 © Dee Copeland