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.
BusinessWeek editors Chris Palmeri, Prashant Gopal and Peter Coy chronicle the highs and lows of the housing and mortgage markets on their Hot Property blog. In print and online, the Hot Property team first wrote about the potential downside of lenders pushing riskier, "option ARM" mortgages and the rise in mortgage fraud back in 2005—well ahead of many other media outlets. In 2008, Hot Property bloggers finished #1 in a ranking of the world's top 100 "most powerful property people" by the British real estate website Global edge. Hot Property was named among the 25 most influential real estate blogs of 2007 by Inman News.