Home & Garden

Is offering a home warranty to a buyer worth it?

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Buying a home is a part of the Great American Dream. Some people like newly constructed houses, some like to build their own homes while others prefer to move into pre-owned homes that often come with pre-owned systems and appliances. In the last case, concerns about the health and age of such items may be raised. As a seller or a real estate professional, you may wonder, is offering a home warranty to a buyer worth it?

Most home warranty companies offer a special category of a home warranty for homes in the market, called buyer’s or seller’s home warranty. These warranties can be purchased up to 30 days after the closing of a deal. The objective is to make sure that the buyer does not have to immediately spend money on repairs and replacements of appliances on the off-chance that they may come with problems.

Considering that a buyer’s primary concern is that after making such a large investment, there shouldn’t be additional out-of-pocket unexpected expenses, a home warranty may be worth it for a buyer. Here’s why:

Why a Buyer’s Home Warranty Is Worth It?

When one moves into a new home, whether it has been built from scratch or was standing for years, there are always chances that some systems and appliances may malfunction. Though most new appliances are designed to work smoothly for about 7 years on average, it’s very common to experience breakdowns before that time.

Expiry of Original Equipment Warranty

Most new appliances and many new systems come with guarantees from original equipment manufacturers. They facilitate easy repairs or replacements for about 2-3 years. A home warranty can help after the expiry of the same. For an annual premium and a trade service fee per request, one can get coverage over the systems and appliances deemed necessary.

Some companies offer structural home warranties on new constructions that cover the systems if anything goes wrong within 2 years of the construction. As a seller, here are the advantages of having such warranties:

  • Faster closing of deals
  • No calls from irate buyers if something breaks down
  • Delegating your liability for repairs and replacements

As a seller or a real estate agent, you are free to focus on sales and closing deals rather than fixing up homes already sold.

The job of finding a repair contractor who is licensed and skilled is the onus of the home warranty company. A home warranty company often has tie-ups with original parts manufacturers via their contractors, which makes it easier to leave complex repairs up to them.

For Pre-Owned Homes

The likelihood of breakdowns due to natural wear and tear increase with the age of the home. Buyers are more likely to opt for older homes if they can be assured that damages will not cost them from their pocket.

Real estate agents usually recommend a home service contract so that they and the seller can rest easy knowing that the buyer won’t call them. Seller warranties come with free l;listing coverage and the contracts can be transferred to the buyer.

Buyer’s warranty plans also cover conditions that typical home warranty plans don’t, such as rust and corrosion damage and pre-existing conditions not identified during the home inspection.

A Few concerns

It is always important to read the fine print of any home warranty plan purchased since they don’t cover every eventuality. Sellers or agents can spruce up systems and appliances best as possible before listing the house, taking advantage of any existing homeowner’s plan.

The buyer’s warranty is best offered after a home inspection to reduce seller liability for damages that may arise later. Should the buyer choose not to purchase the warranty as part of the deal, you as a seller will most likely not be held responsible either way.



Welcome to the Night Helper Blog. The Night Helper Blog was created in 2008. Since then we have been blessed to partner with many well-known Brands like Best Buy, Fisher Price, Toys "R" US., Hasbro, Disney, Teleflora, ClearCorrect, Radio Shack, VTech, KIA Motor, MAZDA and many other great brands. We have three awesome children, plus four adorable very active grandkids. From time to time they too are contributors to the Night Helper Blog. We enjoy reading, listening to music, entertaining, travel, movies, and of course blogging.

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