Good post by Steve Cook on his blog Real Estate Economy Watch on the boom in home warranties, especially the ones that buyers of foreclosed properties are paying for.
Not having looked into this myself, I’d guess there are pros and cons to spending money for a warranty on a foreclosed property. On the one hand, it’ll give you some peace of mind and maybe save you a bundle in case there’s something wrong with the property and it’s covered by the warranty. On the other hand, my experience with warranties is that they tend to be pretty expensive for the amount of coverage you get. That’s why sellers of home appliances push you so hard to get a warranty on, say, a microwave oven—they can make more money on the warranty than they do on the oven itself.
I would love to hear what Hot Property readers can say from their own experience.