You’re told it’s covered — until you need it. Then the clauses start to speak louder than the promises.
Welcome to the world of guarantees, warranties, and insurance contracts: where peace of mind often has footnotes you never read.
This entry in the Consumer Clarity series unpacks the illusion of coverage in real estate, from builder warranties to aftermarket home protections — and how consumers can navigate the murky waters between trust and truth.
New Construction: Peace of Mind… in Pieces
Most new homes come with a builder’s warranty — commonly referred to as a 1–2–10 plan: one year on workmanship, two on systems, and ten on structure. On paper, that sounds strong. In practice, it depends heavily on who built your home and how they interpret their responsibilities.
Some reputable builders go above and beyond. But many stick to the bare minimum — and some let cosmetic or functional issues “expire” before addressing them, arguing that problems weren’t reported within the correct window.
This leads to one of the first disillusions of homeownership:
Just because something went wrong doesn’t mean the warranty agrees with you about when.
And because most homeowners aren’t trained to spot early signs of failure, issues often go unreported until they become costly — or are denied for being “too late.”
The Pre-Owned Home Warranty Pitch
Home warranties offered during resale transactions sound comforting. They’re marketed as a catch-all for aging systems and surprise breakdowns. But here’s the tension:
Many of these policies are strictly limited in scope, and unless you’ve read the exclusions line by line, the moment you file a claim could become the moment you learn what isn’t covered.
Pre-existing conditions? Not covered.
Improper maintenance (even unknowingly)? Not covered.
Replacement value? Often only partial or prorated.
Take HVAC systems, for example: a failed compressor might be replaced, but the rest of the unit — including ductwork or refrigerant upgrades — might fall outside the warranty’s language.
This doesn’t mean home warranties are scams — but it does mean they’re not magic wands.
The core issue isn’t that the warranty lied — it’s that the buyer trusted the promise more than they read the print.
Why Some Agents Stay Quiet — and Others Don’t
You might’ve noticed something strange: some real estate agents strongly recommend home warranties. Others avoid mentioning them at all.
Why the difference?
For some, it’s about keeping deals alive — giving buyers peace of mind to close confidently. For others, it’s about avoiding liability. If a warranty fails to deliver, the buyer may blame the person who recommended it.
While kickbacks for referrals are illegal under RESPA, there are still gray areas in vendor relationships, especially when it comes to “preferred” providers or sponsored marketing.
This doesn’t mean bad intent — but it does mean the ecosystem isn’t always neutral.
In short: if no one is explaining the warranty to you, it might be because they don’t want to be the one blamed when it doesn’t work.
How Home Inspectors Should Handle It
Home inspectors walk a fine line. We’re trained to speak the truth about what we see — not about what a third-party policy may or may not do.
So we often say things like:
“This unit is older, but functional today.”
“A home warranty may be worth considering — just be sure it covers full replacement, not just repair.”
We are not supposed to endorse specific companies, nor are we supposed to give legal advice on coverage. But we can and should educate buyers on what they might face post-closing — especially if large systems are aging.
And yes, some inspection companies do receive compensation for warranty tie-ins. That’s not inherently wrong — as long as it’s disclosed. But that makes clarity even more important.
A good inspector will arm you with insight — not assumptions.
What Should “Guaranteed” Really Mean?
Here’s a better definition:
Inclusion, not exclusion.
Transparency, not loopholes.
The consumer’s interest, not the insurer’s incentive.
There are companies out there trying to do it right. But they often get priced out — because consumers don’t always reward integrity. They reward with price.
So before you buy into a guarantee, ask yourself:
Do I really understand what’s being promised — or just hoping for peace of mind?