Home Warranty when buying for known defects

[Michael S.]

Hello everyone,

I read the first 5 pages of results for the search term "home warranty" but didn't find anything that addressed this question.

I am buying a VA foreclosure, and the inspection determined that the air handler was faulty (heat only worked on "emergency"). One course of action is to negotiate for an extra $4k in closing costs or back out of the deal and make a new offer with those specifics. The other possibility is to request the seller pay for a home warranty. I haven't seen any specifics on the policy, but it seemed a little shady to get a home warranty to pay for something that I already know is broken. The agent said if the seller pays for it, then I will be fine filing a claim even though I knew about the defect prior to the execution of the policy. Likewise, she said if I pay for the policy, then I can't file a claim on that specific damage.

I will try to get my hands on the exact literature of one of these companies' policies, but I wanted to get your thoughts first.

Amplifying information: I like the price, and would have paid $5k more-- enough to cover the cost of the HVAC repairs. It is a townhouse built in 2007 with minimal damage besides the AC. It has been listed as an REO for 13 months, with the asking price dropping from $122k -> $65k (with our offer at $60k). This will be owner occupied for 1.5 years, then I will either rent of sell it.

Thanks!