How to Avoid Buyer's Remorse With a Home Warranty

Buying a home in today’s market can be an overwhelming adventure. When the sale finally closes, it's natural to feel a tremendous sense of relief and accomplishment — especially if you’re a first-time home buyer. You’ve budgeted for your new mortgage and monthly household expenses, you’ve met your neighbors, and now it’s time to settle into homeownership.

So, what happens when your AC system unexpectedly wears down during a heat wave or your dishwasher stops working properly? What if your washer fails and laundry begins piling up? Not only do you have to find someone to repair or replace these essential household items, but you may have to pay hundreds or even thousands of dollars in unexpected bills. Protecting your household budget can be challenging under such circumstances and can often lead to home buyer’s remorse.

The Hidden Costs of Homeownership

Some of the top regrets about buying a home include expensive home maintenance and repair expenses, and losing the convenience of simply calling a landlord to get things fixed.

The frustration and expense of dealing with everything from a leaky faucet to a failing refrigerator or a broken plumbing system can be a financial strain on top of property taxes, mortgage payments, and other household expenses. Fortunately, a home warranty can help you manage the cost of owning a home and help you prevent buyer’s remorse.

How a Home Warranty Can Help

It’s natural when owning a home to have at least a few moments of wondering: “Did I make the right choice?” However, you don’t want those concerns to turn into full-blown buyer’s remorse.

Unlike homeowners insurance, which covers catastrophic damages and losses caused by vandalism, natural disasters (fires, storms), and other major events, home warranty coverage protects your household’s everyday appliances and systems. When they inevitably fail due to normal wear and tear, your home warranty can help protect your budget from costly repairs and replacements.

Learn more about the difference between homeowners insurance and home warranties.

What a Home Warranty Can Cover

Understanding the true cost of homeownership and preparing for the unexpected can help you feel more confident long after closing. A home warranty can cover many of the essential home appliances and systems you rely on to keep your home running smoothly, including:

What Home Repairs Can Cost Without a Home Warranty

Many homeowners simply don’t have extra money to set aside each month. When you're already managing the ongoing costs of homeownership, an unexpected repair or replacement bill can quickly lead to buyer's remorse.

Even if you recently purchased a newer house or a home with gleaming modern appliances and systems, things could break, often when you can least afford it.

See our budget protection graphic showing typical repair and replacement costs for major home appliances and systems.

How to Avoid Buyer’s Remorse

Owning a home comes with new responsibilities, but it doesn't have to come with regret. Home buyer’s remorse often comes from choosing a more expensive house than you could afford, a poor location, not being honest with yourself about what you need vs. what you want, or settling for something just to “get into the market.” Consider these practical homebuying tips to help you prevent buyer's remorse:

Find a Good Real Estate Agent

A savvy real estate agent who knows the local market and has your best interests at heart can make all the difference in the homebuying process. From evaluating properties to negotiating the best deal, expert guidance can help you purchase with confidence.

Make a List, and Check It Twice

Use a home-viewing checklist to track important details as you evaluate potential homes. These days, buying a home within your budget will likely involve trade-offs, and your agent can help you prioritize your must-haves vs. nice-to-haves.

Pay Attention to Your Home Inspection

When buying a home, your inspection report can help you better understand your home’s physical structure and components, as well as the overall condition of your home. It should detail the age and condition of your home’s systems and appliances, and highlight any needed maintenance and potential repairs you should plan for.

Be sure to ask your home inspector questions so you can better understand any issues identified during the examination. If your inspection report reveals hidden issues, it may be a red flag that the home hasn’t been well cared for, and you may want to continue your home search.

See our guide on how long home systems and appliances last.

In a competitive market, it can be tempting to forgo a home inspection to make your offer more attractive, but unless you are prepared for the unexpected and have a financial cushion to rely on, it can be a risky move. Let your real estate agent guide you.

Location, Location, Location (and Layout)

To prevent buyer’s remorse, it’s important to focus on the things that you can’t change about a house: location and layout. If a quiet neighborhood or short commute are high priorities for you, keep that in mind on your home tours. If you find a home you love that's farther away than you initially wanted, that compromise could lead to buyer's remorse down the road.

It’s usually difficult and expensive (and sometimes impossible) to dramatically change a home’s layout. You may be able to remove a wall or two, but not if they’re load-bearing. Similarly, relocating kitchens or bathrooms often requires extensive and costly plumbing and electrical work.

Don’t Buy More Than You Can Afford

It may be tempting to buy the biggest home you can afford, but if it stretches your budget too thin, it may not be the right home for you. One of the biggest first-time home buyer mistakes is buying a more expensive home based on the assumption that income will increase, or that it will become easier to afford over time.

The cost of owning a home goes up exponentially with a larger home — higher property taxes, mortgage payments, insurance, household bills, and maintenance costs. Remember, you can scale up to a larger house later if your budget allows, but buying on future projections is a risky move that can lead to home buyer’s remorse. Before visiting homes, pencil out how much home you can afford and stick to it.

Include a Home Warranty When You Buy a House

As we've covered, a smart way to minimize financial risk, maximize budget protection, and prevent buyer's remorse is to include a home warranty plan for buyers, also called a real estate home warranty, in your home purchase. Your real estate agent can order it for you, and coverage begins the day you close, so you’re financially protected from your first day of homeownership.

You can also buy a home warranty after closing. Besides comprehensive home warranty coverage, all First American Home Warranty plans include:

• Budget protection from costly repairs or replacements when covered appliances and systems break
• Unlimited service requests via phone or online 24/7
• The convenience and security of not needing to find help on your own
• Coverage that lasts for a full year after closing, with annual renewals available

Just bought a home? You can add a real estate home warranty for up to 60 days after your closing date.

Already own a home? Discover the benefits of home warranty coverage for homeowners.

FAQs for Home Buyers

Can a home warranty help prevent buyer’s remorse?

Yes. A First American home warranty can help reduce home buyer's remorse by protecting your budget from costly repairs and even replacements when covered items fail due to normal wear and tear. It can also save you the hassle of finding help on your own.

As a new home buyer, how can I get home warranty coverage? If you just bought a home, or bought one within the past 60 days, your real estate agent can order you a real estate home warranty. You can start using your coverage and exclusive member benefits the day you close.

Do I need a home warranty if I have homeowners insurance?

It’s a good idea to have both, because coverage differs between a home warranty vs. homeowners insurance. Home warranties help protect the household appliances and systems you rely on every day (such as dishwashers, ovens, cooktops, plumbing and electrical systems, and more) when they break from normal wear and tear. Homeowners insurance, on the other hand, helps protect your home and belongings from fire, storms, and other natural disasters, as well as from vandalism and other catastrophic events.

How can I better manage the cost of owning a home?

By making repairs and replacements more predictable and manageable, home warranty coverage can help protect your budget when unexpected breakdowns occur. Appliances and systems don’t last forever, and a home warranty can help reduce the financial impact of repairing or replacing them.

Why choose First American Home Warranty?

For more than 40 years, First American Home Warranty has helped homeowners keep their homes running smoothly, providing quality protection for home appliances and systems across the nation. See how our coverage can help protect your budget and why homeowners trust us.

*In some instances, Homeowner and First American may agree to payment of cash in lieu of repair or replacement. Payment will be made based on First American’s negotiated rates with its suppliers, which may be less than retail. Please review the sample contract for specific coverage, terms and limitations.