Q: My husband and I will be closing on a house soon. Should we purchase a homeowners' warranty at settlement for $395 to cover the appliances and the electrical, heating and other mechanical systems?
Leslie Sullivan, Columbia
A: Although the standard real estate contract does contain some express warranties and although the new seller disclosure law in Maryland does provide some protection to home buyers in the event of misrepresentation or fraud, it is generally accepted in Maryland that there are no implied warranties in the resale of a completed residence.
In the property condition paragraph of the standard real estate contract, the seller warrants that the property will be in substantially the same physical condition as of the date that the contract is ratified. If the hot water heater breaks one week after ratification but before settlement, the seller must repair or replace it.
The seller generally certifies that the electrical, plumbing, air conditioning and other mechanical systems will be in operating condition at settlement. These items may not be in perfect condition, but they must be in general operating condition. But ,, this does not mean that the seller will guarantee the condition of these items after settlement.
Regardless of whether you buy a warranty plan or require warranties in the sales contract, you should be careful to find out about known defects before signing a contact. In fact, under Maryland law, you are entitled to a disclosure form from the seller listing the property's condition. If your house contains any severe defects, you should try to have them repaired by the seller before settlement.
Most buyers of an existing house at least five years old should buy a homeowners' warranty at settlement, if available. The price usually is between $295 and $395. Check out what is and isn't covered under the contract.
Generally, in addition to the electrical, heating and mechanical systems, the major appliances such as stove, refrigerator, dishwasher, and washer/dryer, should be covered. Make sure that you deal with an established warranty company with a good track record.