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Most home sellers have two goals in mind when selling a house. You want to sell your home for the highest return on your investment and do it as quickly as possible.

You may be wondering how you can add to your chances of success in reaching these two goals, and we can offer some guidance along the way. One of the things you can do to help is to offer a home warranty with the sale of your home.

You’ll find that most new construction communities offer a home warranty with each new home purchased, and you want to be able to compete with them when it comes to selling an established home. Let’s take a closer look at this guide to offering a home warranty when selling a house.

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What is a home warranty?

The first thing you want to know if that a homeowner’s insurance policy and a home warranty are two different things. It’s important to know the difference so that you can make sure you are presenting the information in the best way to buyers.

Home warranty

A home warranty typically covers the first year that the home is owned by the new buyer and covers major systems and appliances that need repair or replacement. A home warranty may cover things like water heaters, dishwashers, garbage disposals, and air conditioning systems.

In contrast, homeowner’s insurance protects the home against damage that is caused by crime, weather related issues, fires, or accidents. It’s important to note that not all weather related incidents are covered, however, so a homeowner may want to purchase additional coverage for things like floods.

While homeowner’s insurance is usually mandatory for homeowners with a home mortgage loan, a home warranty is not a requirement in most situations. For this reason, adding a home warranty as an incentive for those who are thinking about purchasing your property can be a great selling point because it offers the new buyer some peace of mind in the event that things go wrong in that first year.

How much does a home warranty cost?

We can’t quote you exact costs for a home warranty because the costs differ according to area, home, and other factors. We can tell you that most policies will cost the home seller between $300 and $500 for a year of protection once the home is sold. Additional costs may come into play should you choose upgrades that are offered with the policy.

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The cost of the policy may seem like an addition to the sale that you don’t need but considering that it could be an investment that helps seal the deal on a sale, it may be worth the extra money spent. If you’re trying to sell an older home, this could be the peace of mind a buyer needs to trust the sale.

Buyers become wary of older homes because it’s hard to tell what kind of issues are waiting just below the surface. First time home buyers may steer towards a newer home without the addition of a home warranty that acts as a buffer against future expenses.

If you’re worried about losing out if the sale is delayed, there are some programs that provide a warranty when the home sells. In this case, you won’t need to spend any money until the home sells, which could be important if the real estate market takes a slow turn.

Do I need a warranty if I have a home inspection?

The purpose of an inspection is to verify that all systems and structures within the home are in good condition at the time of the sale. Inspections are unable to predict future issues that could be costly.

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Let’s say that the garbage disposal is working perfectly at the date of the sale but breaks down within 60-days of the sale. The home warranty will be there to protect the new owner when it comes to the repair costs of this issue.

Remember, the home warranty you are purchasing to help with the sale of your home is not just some marketing strategy. This home warranty should be a comfort to the seller, as well.

If something breaks down or needs to be replaced within a few months of the sale, the buyer or their attorney may try to contact you. Without a home warranty in place, you may be held responsible for a problem that is considered pre-existing, but a home warranty protects you after the home is sold.

Do I need to know special warranty terms?

One important part of getting a home warranty is making sure you understand what is covered and what is not covered. Knowing the policy terms for conditions can be beneficial when it comes to what could make the policy void or nullify the coverage offered.

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One example of something important to know is that an appliance that is currently under manufacturer’s warranty is not covered by the home warranty. Check your appliance warranties to determine which qualify for coverage under the home warranty you purchase.

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Have all receipts for maintenance costs or repairs on appliance in a safe place for easy reference when considering the warranty. Older appliance may need to be replaced in order to qualify for coverage under the home warranty.

It’s important to note that a warranty may be impacted if the appliances are not properly maintained and repaired. Keeping appliances in good working order saves money in the long run.

How does a home warranty work?

The warranty company has authorized service providers that are used when a homeowner calls in about an item that has malfunctioned. In most cases, the warranty holder pays a service fee for the contractor to arrive, but they do not pay for the services that are provided for the repair.

home warranty

There may be a deductible required for needed repairs, but when you consider the entire cost of some repairs is in the hundreds of dollars, the deductible is a small price to pay for peace of mind. Once the repair is complete, make sure that you provide a review of the service provider so that the warranty company is able to keep high-quality providers for service calls.

What should I do before I get a home warranty?

Since a warranty company expects all appliances and systems to be in good condition at the time the warranty is provided, it’s important to do a thorough check around your home for things that need attention before you purchase the warranty. It’s not acceptable to sell a home with systems that are known to need repair.

The inspection you do on the home before looking for a home warranty can end up saving you money in the long run and keep deals from falling through. The last thing you want is for an inspection done after the offer is accepted to find an issue that causes the buyer to walk away from the sale.

In most cases, you are required by law to give a full disclosure of any problems with the property, and this includes broken, faulty, or malfunctioning systems, appliances, or structural elements. Taking care of needed repairs ahead of time means that you can offer a full disclosure that is honest and free of issues that need the attention of the future owner.

How do I find a home warranty company?

Businesses that specialize in home warranties include insurance companies, bank, and home warranty businesses. Choosing a home warranty company requires the same diligence that you would show when choosing any other service provider.

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In any industry, you’ll find companies that follow through on their promises and make sound business decisions that help build a positive reputation. You’ll also find plenty of companies that don’t deliver on promises and earn a bad reputation.

How to Find the Right Real Estate Agent to Sell a Home

Since you home is one of the biggest investments you have, and the sale is just as important, you want to do proper research before choosing a warranty company. Check with your real estate agent to see who they recommend.

While researching warranty providers, investigate what is and isn’t covered. Check to make sure the terms are crystal clear and in writing, so there’s no room for misunderstanding.

Compare prices between companies and gauge what systems and appliances qualify for coverage, deductibles, and exclusions. Choose a warranty provider whose terms and coverage are both clear and affordable.

How can I use a home warranty in negotiations?

A home warranty can be a wonderful way to attract potential buyers and offer comfort to those who are concerned about buying an older home, but it can also be a wonderful tool when used in negotiations. When sending back a counteroffer you may choose to add the warranty as a bonus to help steer negotiations in your favor.

home warranty

While there are people who believe that the purchase of a home warranty to include with the sale or to be used in negotiations is not necessary and a waste of money, it’s important to keep a few things in mind. It’s true that the warranty is not something you are required to offer with the sale of your home, but it can be a positive selling point that shows you care about the buyer’s experience.

Offering a home warranty could be the difference between selling your home for the best return on the investment you’ve made and needing to lower the asking price by thousands of dollars to secure a sale. When you think about it in those terms, the idea of spending a couple hundred dollars for a home warranty sounds like a pretty good one.


Offering a home warranty with the sale of your home is an easy way to offer reassurance to potential buyers that you are invested in making sure they are not left with unexpected expenses should something need repair after the sale is complete. You’re sending them the message that you care about the quality of the home and property, which means that you’ve most likely taken care of the property and made sure that things stayed in proper working condition.

By taking care of necessary maintenance and repair before the home inspection done by the buyer, you are setting the next owner up for success and providing them a good foundation for the use of the home warranty should it be needed.

Your real estate agent will help you set a competitive asking price that makes sense for the real estate market. Having the home warranty on your side may increase the value of your property and offer potential buyers’ additional incentive for purchasing your property.

With the right listing price, all systems in good order, and a home warranty included in the sale, you’re setting yourself up for a successful sale. Remember, your real estate agent has experience in dealing with a variety of service providers and vendors in the area, so ask them for their recommendations.

Give 10X Home Team a call today at 602-352-3600 to learn more about local areas, discuss selling a house, or tour available homes for sale. Contact us here.
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