Should You Get a Home Warranty When Selling Your House?

Selling a home comes with many decisions, and one of the most overlooked yet potentially valuable options is purchasing a home warranty. While many buyers consider home warranties to protect themselves after purchasing a property, sellers can also benefit from having a home warranty in place before and during the sale process. But is it worth the investment?

This guide will explore how a seller’s home warranty works, what it covers, how much it costs, and why it could be a smart move when selling your home.

What is a Seller’s Home Warranty?

A seller’s home warranty is a service contract that helps pay for repairs or replacements of major home systems and appliances while the home is for sale. This warranty, unlike the one a buyer purchases after closing, protects the seller from unexpected repair costs before the sale is complete.

Seller’s home warranties are ideal for older homes with aging systems and appliances. If something breaks while the home is listed for sale, the warranty can help cover the repair costs. This reduces the chances of last-minute expenses that could delay the closing or cause renegotiations.

What Does a Seller’s Home Warranty Cost?

The cost of a seller’s home warranty varies depending on the provider, the level of coverage, and the location of the home. On average, sellers can expect to pay between $300 and $600 for a basic policy, with optional add-ons increasing the price.

Factors that influence the cost include:

• The age and condition of the home’s systems and appliances
• The warranty provider and plan selected
• The level of coverage, including any additional protections for items like pools or septic systems
• The location of the home, as prices can vary by region

In addition to the upfront cost of the policy, sellers should be aware of service call fees, which typically range from $75 to $150 per claim. These fees apply whenever a technician is dispatched to assess or repair a covered item.

What Does a Seller’s Home Warranty Cover?

A seller’s home warranty typically covers major household systems and appliances, but coverage details vary by provider. Most standard plans include protection for essential home components that could break down due to normal wear and tear.

Commonly covered items include:

• Home systems: HVAC (heating, ventilation, and air conditioning), plumbing, electrical, and water heaters
• Kitchen appliances: Dishwashers, ovens, stovetops, refrigerators, and built-in microwaves
• Laundry appliances: Washers and dryers

While a home warranty provides valuable protection, it’s important to review the policy carefully. Some items may not be covered, and pre-existing conditions or improper maintenance can result in claim denials. If applicable, sellers should also consider optional coverage for items like pools, spas, or well pumps.

Benefits of a Seller’s Home Warranty

A seller’s home warranty offers multiple advantages that can make the selling process smoother and more cost-effective. Here are some of the key benefits:

Attract More Buyers

Buyers often feel more confident purchasing a home with a warranty in place. It reassures them that if something breaks after moving in, they won’t be stuck with expensive repairs. This added peace of mind can make the home more appealing in competitive markets.

Reduce Post-Sale Disputes

If an appliance or system fails soon after the home is sold, a home warranty can help cover repairs, reducing the risk of the buyer blaming the seller for undisclosed issues. This can help prevent legal disputes and maintain a smoother transaction.

Minimize Out-of-Pocket Repair Costs

Selling a home can be expensive, and unexpected repair bills can add to the financial burden. A home warranty helps cover repair or replacement costs if something breaks while the home is on the market.

Transferring the Home Warranty

One of the biggest advantages of a seller’s home warranty is that it can often be transferred to the buyer upon closing. This means the buyer will receive continued coverage for a set period, usually one year after the sale.

Here’s what sellers should know about transferring a home warranty:

• Some home warranty companies charge a transfer fee, while others include it as part of the policy.
• The buyer will typically have the option to renew the policy after the initial coverage period.
• Transferring a home warranty can be a great selling point, as it provides added value to the buyer.

Before purchasing a home warranty, sellers should confirm the transferability details with their provider to ensure a smooth handoff to the new owner.

Why Should a Seller Buy a Home Warranty?

A seller’s home warranty isn’t mandatory, but it can be a wise investment, particularly if:

• You have an older home. If your appliances or systems are old, a home warranty can help you avoid unexpected repair costs before closing.
• You want to reduce negotiation risks. If something breaks during the home inspection or before closing, the warranty can cover repairs. This can help you avoid price cuts or concessions.
• You want to attract more buyers. Offering a home warranty can make your home more appealing in the market, especially in areas where buyers look for extra incentives.
• You’re selling in a buyer’s market. When buyers have many homes to choose from, including a home warranty can make your listing stand out and more attractive.

The Bottom Line

A seller's home warranty can help when selling your house. It protects against unexpected repairs, attracts buyers, and can reduce disputes after the sale. Although it comes with a cost, the benefits — like increased buyer confidence and less financial risk — often make it worth it.

If you're getting ready to sell your home, look into the best home warranty providers to find a plan that fits your needs. Investing a little now can make the selling process easier and more rewarding later on.