Who Pays For Home Warranty: Buyer Or Seller?

Buying a new home is a huge investment and one that you want to protect.

Each year plenty of homeowners spend a lot of money on unexpected repairs of home appliances and systems.

And ccording to House Methods, homeowners pay around $2,000 per year on home maintenance services

A home warranty can help with that, but you might be wondering who pays for home warranty coverage – the buyer or the seller?

There is no right or wrong answer to this question, as it ultimately comes down to negotiation between the buyer and seller. However, the seller usually pays for the home warranty coverage.

Read on to learn more about home warranties, who pays for them, and how they can benefit both buyers and sellers in a real estate transaction.


Who Pays For Home Warranty?

Who Pays For Home Warranty

A home warranty is something you should consider getting if you are buying a new home.

This will help cover the costs of having main appliances and systems serviced, repaired, and replaced. However, who pays for the home warranty: the buyer or the seller?

The right answer is that anyone can purchase a home warranty, including buyers, home sellers, previous homeowners, and even renters.

The regulations of your area will determine whether the buyer or the seller is responsible for paying for the home protection plan and home warranty coverage.

Since it is in the seller’s interest, it is common in many areas for the seller to be the one to pay for the home warranty.

Buyers can buy a home warranty plan either via the real estate agent who helped them buy the house or directly from a home warranty company.

Many homebuyers will request that the seller cover the cost of the first year of a home warranty.

This benefits both parties as it gives the buyer protection and peace of mind while giving the seller a competitive advantage over other sellers who have not purchased home warranty coverage.

Reddit users share their experience:

What is a home warranty? And why is the buyer insisting a pay for a home warranty at closing? Will I be liable for anything after closing?
by u/curlymama65 in RealEstate

Read: How Do We Review Home Warranty Companies?

Read: Is Home Warranty Worth It?

How Do Home Warranties Work?

How Do Home Warranties Work

A home warranty is an insurance policy that helps cover the cost of repairing or replacing major appliances and systems in your home.

The most common type of home warranty is a one-year protection plan that covers repairing or replacing items such as air conditioners, electrical systems, plumbing, and more.

Some home warranties also offer coverage for things like pools, septic systems, and guest houses.

Home warranty coverage typically starts at the time of purchase and lasts for one year. However, you can also find home warranty plans that cover you for up to 10 years.

When you file a claim with your home warranty company, they will send a technician to your home to assess the issue.

If they find that your home warranty plan covers the issue, they will repair or replace the item.

If your home warranty does not cover the issue, you will be responsible for paying for the repairs yourself.

Read: How Much Does A Home Warranty Cost Per Year?

How Does a Home Warranty Help a Buyer?

Here is how a home warranty may help a buyer:

  • Protects against unexpected expenses: After cashing in a lot of money on a home warranty, a buyer may not be prepared to bear unexpected expenses. As such, having a home warranty may help the person cover such costs.
  • Gives peace of mind: Knowing that a buyer has added protection in case of failure of any appliance or system gives him/her peace of mind and confidence.
  • Ensures a simplified repair process: A new home buyer may not be familiar with the local area and service providers. With a home warranty company, they can simply make a call, and the company would send the repairman to their house, saving them from a lot of hassle.

How Does a Home Warranty Help a Seller?

Here is how a home warranty may help a Seller:

  • Acts as an added incentive: By purchasing a home warranty, a seller can bring that extra incentive on the table and can sway a buyer into purchasing the house.
  • Peace of mind: Knowing that in case a home appliance or system breaks down, the company would send a repairman to fix the issue offers the seller peace of mind.
  • Maintenance: The sellers are supposed to maintain the home until someone buys it, so a home warranty helps in maintenance.

Is Sellers Warranty Different That Buyers Warranty?

The seller’s warranty is a bit different than the buyer’s warranty. The major difference lies in the coverage and duration.

The seller’s warranty coverage may not be as comprehensive as a buyer’s coverage.

Also, the duration for a seller’s warranty lasts for six months or till the listing period. In contrast, a buyer’s warranty period lasts for a year or three.

How To Choose A Real Estate Home Warranty Plan Worth The Money?

How To Choose A Real Estate Home Warranty Plan Worth The Money

There are a plethora of home warranty companies, and to save you time and money, here’s a list of things you should look for in a home warranty plan:

Check what it Covers

An important thing to look for in a home warranty plan is coverage. Home warrant plan generally offers three kinds of plans: System plan, appliance plan, and a combination of both.

Sellers should go for a plan that serves the purpose and covers all the essential items in their home.

See how much it Costs

The cost is the next important thing that you should look for in a home warranty plan.

The realtors and sellers may provide listing coverage for free, but the buyer needs to check the price and match it with their budget.

Service Process

Some companies do not allow you to get the repairs done by your contractor and send their own technician. Hence you should see if you will be comfortable with this.

Read Customer Reviews

Before opting for any home warranty company, it is essential to check what their existing customers have to say about it.

You can check for customer reviews on Yelp, Google reviews, Trustpilot, etc. You should also look for the BBB rating and with which institute the company is accredited.

Examine the Claim Process 

The ease of the claim process is also worth considering when choosing a home warranty plan. The number of steps involved, customer support, etc., are all important.

Turnaround Time

Many people overlook the turnaround time, and this is where they get the most pissed off.

Some companies send the technician the same day or within 24 hours, while some may take three days or even more.

So make sure you have considered the turnaround time because that is how long you will have to wait for the repairman to come.

Bottom Line

To sum it up, the buyer is not obligated to pay for a home warranty, and the seller is not required to offer one.

However, in most cases, the seller pays for the home warranty as it is seen as an advantage to buyers.


Does a home warranty really help a seller or realtor?

Yes, having a home warranty expedites the selling of a property. It acts as an incentive for the buyer to purchase the property.

It is also seen that having a home warranty helps close a deal 11 days early as compared to a house without it.

How do I know if I have a home warranty?

If you have moved into your new house and want to know if you have a home warranty or not, then you can simply ask your realtor or seller about the same.

However, note that the seller or realtor will need to transfer the home warranty to your name for you to use it.

Does every home come with a home warranty?

No, not all homes come with a home warranty. It is optional to buy it both for the home seller and the home buyer.

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