My hard drive S.M.A.R.T. status is reading 'Failing' for my 27' iMac. Does this mean that I need to take my iMac to the Apple Store?

Ok, the whole story in a nut shell.
My computer was lagging pretty badly and so I turned it off and on again, obviously. But when I turned it back on, I couldn't get to the login screen, the computer would just freeze at the white loading screen with the Apple logo and the loading spinner.
After that, I left it for a couple hours thinking that it might resolve, when it didn't I forced reboot and booted of the OS X instillation disk, following advice of the internet about running diagnostics.
I opened Disk Utility to see what was going on and I then attempted to run repairs on the hard drive, this failed and froze up. So I rebooted. Next time I open up Disk Utility it highlights the internal hard drive in red and says that the S.M.A.R.T. status is failing. I've seen a couple other people with this problem and I was wondering if this is a reoccurring problem with iMacs or a one of thing, either way, what should I do, take it into the Apple store?
F.Y.I.
I don't have AppleCare and my computer is no longer under warranty, so if I have to take it in, how much do you think it will cost me?

Beaneebar wrote:
I don't have AppleCare and my computer is no longer under warranty, so if I have to take it in, how much do you think it will cost me?
If the machine matches your profile, Mac OS X (10.7.4), iMac 27', 2012 model, refurbished, then it should be covered under the first year of use. Contact Apple's Express Lane and verify. If it is, then after getting it fixed, purchase AppleCare—the cheapest insurance policy available for Macs.

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