Should You Offer a Home Warranty When Selling Your House?

Selling your home involves a lot of decisions, and one of them may be whether to include a home warranty as part of the deal. While not required, this added layer of protection can ease buyer concerns, help your listing stand out, and even make the closing process smoother. 

But before you commit, it’s worth understanding exactly what a home warranty does and whether offering one is the right move for your situation. So if you’re planning to sell your home in Austin or Atlanta, or anywhere in between, here’s what you need to know before deciding to include a warranty in your listing.

What is a seller’s home warranty? 

A home warranty is a service agreement that covers the repair or replacement of major systems and appliances in a home. Unlike homeowners insurance, which protects against things like fire or weather damage, a home warranty typically steps in when something breaks down due to wear and tear. Think air conditioning, plumbing, kitchen appliances, or your water heater.

How much does a home warranty cost?

Plans vary, but most home seller warranties last for a year and offer different tiers of coverage. The cost often ranges from a few hundred to just over a thousand dollars, depending on the provider and coverage level. With a home warranty, most companies charge a service fee each time you request a repair. This fee usually ranges from seventy-five to one hundred fifty dollars per visit, depending on the provider and your specific plan.

Beyond the service fee, the warranty covers the remaining cost of the repair or replacement up to the limits of your policy

Do home warranties protect the buyer or the seller?

A home warranty is primarily designed to protect the buyer, not the seller. Once the home sale closes, the warranty coverage transfers to the new homeowner. This gives the buyer peace of mind that if something breaks shortly after moving in, they will not face the full financial burden of unexpected repairs.

That said, there are also some protections for the seller. Such as if a major system fails before closing, the warranty can help cover the cost, reducing the chance of last-minute negotiations or delayed sales. In addition, it minimizes the likelihood of disputes for the seller. If something breaks right after the buyer moves in, the warranty gives them a clear path to get it fixed without circling back to the seller with complaints or legal concerns.

Why do sellers offer home warranties? 

Offering a seller home warranty can be a strategic move when selling. It shows buyers that you’re standing behind the condition of your home, and it can also protect you from potential post-sale disputes if something breaks shortly after closing.

Some sellers even purchase a home warranty while their property is still listed, giving coverage during the time it’s on the market. That means if your HVAC goes out before the sale is final, you could be covered. Once the home sells, the warranty transfers to the buyer for a full year.

How a home warranty can help you sell

Selling a house can come with hurdles. Buyers are often nervous about hidden issues or common home inspection problems. Even if your home is well cared for, questions might come up about the age of the plumbing or appliances. A home warranty adds a level of reassurance.

In competitive markets, offering a home warranty can give your property an edge by providing peace of mind—especially for first-time buyers. It protects you if something breaks before closing and serves as a valuable negotiation tool once an offer is accepted.

Understanding standard home warranty coverage and add-ons

Coverage will vary depending on the provider and plan you choose, but most home warranties fall into two categories: standard coverage and optional add-ons.

What’s typically included in standard coverage

Most basic plans will cover essential systems and major appliances. This often includes:

• Heating and cooling systems
• Electrical systems
• Plumbing systems
• Water heaters
• Kitchen appliances like the stove, oven, and dishwasher
• Laundry appliances like washers and dryers
• Built-in microwaves and garbage disposals

These are items that tend to get daily use and can be costly to repair or replace. A standard warranty is designed to reduce the financial strain if something fails during the first year after the sale.

Optional add-ons you can include

Depending on your home’s features, you may want to upgrade your coverage to include additional items. These are often available as optional add-ons:

• Pools and spas
• Septic systems
• Roof leak protection
• Additional refrigeration units (like a wine fridge or second freezer)
• Well pumps
• Central vacuum systems
• Smart home components or electronics (offered by some newer providers)

If you’re selling a home with features like a pool or guesthouse, adding extra coverage might make your listing more attractive. Just keep in mind that add-ons come at an extra cost, and some may require inspections before they’re included in the policy.

What isn’t included in a home warranty?

Seller Home warranties protect against unexpected breakdowns but don’t cover everything. Typically excluded are:

• Routine maintenance: Tasks like filter changes, HVAC servicing, and gutter cleaning.
• Pre-existing issues: Problems that existed before coverage began.
• Structural and cosmetic damage: Foundation, roof structure, paint, and flooring.
• Code upgrades and permits: Repairs needed to meet current building codes.
• Excluded systems: Specialty items like pools, septic tanks, or smart home devices unless added separately.

How is home warranty different from homeowners insurance?

It’s easy to confuse home warranty and homeowners insurance, but they cover very different things.

What a home warranty covers

A home warranty helps cover the cost of repairing or replacing appliances and systems that fail due to regular use. This might include your HVAC, plumbing, electrical system, refrigerator, or even a garage door opener. It is designed to reduce the financial burden when something stops working after years of wear.

What homeowners insurance protects

Homeowners insurance protects you from unexpected events and major damage. If your home is damaged in a fire, a storm, or a break-in, insurance helps cover the cost to repair or rebuild. It also offers personal property protection and liability coverage in case someone gets hurt on your property.

One handles repairs, the other handles risk

In short, a home warranty helps with routine breakdowns. Insurance steps in during emergencies and disasters. They serve different purposes, and one does not replace the other.

Why you might need both

Buyers often feel more secure when they know both protections are in place. Insurance keeps the home financially protected against large-scale loss, while a warranty helps them handle everyday repair issues without extra stress. When paired together, these two tools offer peace of mind on all fronts.

>>Read: Home Warranty vs Home Insurance

The downside of home warranties

While home warranties can offer protection and peace of mind, they’re not a magic fix. There may be coverage limits, exclusions, or delays in service. Some buyers might prefer a price reduction over a warranty. In rare cases, a negative experience with the warranty company can reflect poorly on you after the sale.

If you’re unsure, talk with your real estate agent. They’ll know what buyers in your area expect and whether a warranty is likely to make a difference in your sale. Lastly, using a home maintenance checklist can keep you on top of additional unexpected repairs.

FAQs: Is a home warranty right for your sale? 

Is it worth the cost? 

Sellers often find home warranties worthwhile to attract offers or close faster, especially for homes with older systems or appliances. Warranties reduce buyer anxiety and potential sale issues. While less clear for newer homes, agents recommend them by default, particularly in cooler markets needing buyer incentives.

What is a limited seller’s home warranty?

A limited seller’s home warranty is a type of warranty that covers the home during the time it is listed for sale, up until closing. It is designed to protect the seller from unexpected repair costs if a covered system or appliance breaks before the home sells. Once the sale is finalized, coverage typically transfers to the buyer for the remainder of the term.

Are existing home warranties transferable?

Yes, most home warranties are transferable from the seller to the buyer at closing. In many cases, the warranty company handles this automatically, but it’s always a good idea to confirm with the provider and ensure the buyer knows how to activate or manage the coverage after the sale.

How can sellers purchase a home warranty?

Sellers can purchase a home warranty through any major warranty provider. Many real estate agents have preferred companies they work with and can help coordinate the process. Typically, you can choose between coverage that starts immediately or coverage that activates once the home is under contract. Costs and coverage options vary, so it helps to compare a few different providers.

Should I offer a home warranty in a buyer’s or seller’s market?

In a buyer’s market, offering a home warranty can make your home more attractive to cautious or budget-conscious buyers. It shows you are offering added value and peace of mind. In a seller’s market, where demand is already high, a warranty might not be necessary, but it can still help your listing stand out or ease buyer concerns if your home has older systems or appliances.

>>Read: What’s a Buyer’s Market vs Seller’s Market?

Do buyers actually care about home warranties? 

Yes, many do, especially first-time homebuyers, or those shopping at the top of their budget. Knowing that they won’t be on the hook for an expensive repair right after moving in can be a major selling point. If you’re including a warranty, be upfront about the details, and choose a reputable company with good customer service ratings.

The post Should You Offer a Home Warranty When Selling Your House? appeared first on Redfin | Real Estate Tips for Home Buying, Selling & More.