Do you recommend homebuyers invest in a home warranty?

A:

Buyers and sellers have the option of including a home warranty into the contract when a home is being sold and purchased.

Typically, when my buyers purchase a home, I give them the gift of a one-year home warranty policy as a gesture of goodwill and to help them deal with unforeseen challenges in that first year of ownership.

Every policy and set of coverages is different, and so much depends on the assessment of the service provider — typically a third-party repair person — on each particular service call. Based on the policy coverage, and for a relatively reasonable, flat service fee, a technician will diagnose and/or address the problem at hand, which may cost less than hiring a standalone company to help.

My buyers have utilized their home warranty policy to re-key their locks, address plumbing issues, and repair or replace appliances. Some investors use home warranty services to maintain their investment properties. Sometimes buyers don’t use the policy at all and don’t renew the policy. It’s like a health insurance policy: sometimes you use it a little, and sometimes a lot.

A:

Deciding to invest in a home warranty will depend on several factors, including the home’s age, how much work you’re willing to do yourself, and whether you have reserves for unexpected repairs.

A home warranty may be a good idea if inspections show your appliances or home systems may be near the end of their lifespan, if you’re not a DIY-er, or don’t have a handyman on speeddial. Also, if you don’t have a reserve fund set up, a home warranty could help.

You may not need a home warranty if you’re already experienced with home improvements, or if you’re buying new construction (most builders provide a warranty covering workmanship and materials).

Home warranties vary wildly in their coverage, terms and limitations, so if you do consider purchasing a warranty to protect your home investment and for peace of mind, always read the fine print.

Insider tip: If you’re a seller, offering a home warranty can give you an edge over the competition in today’s market.

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Send an email to Jordan Guinn at Realestate@sfchronicle.com