Should Sellers Offer Home Warranties?

A home warranty comes up in a lot of transactions — sometimes as a buyer request, sometimes as something a seller offers proactively. It's one of those items that sounds optional until it suddenly isn't, so it's worth understanding what it actually covers before you decide whether to include one.

What a home warranty actually is

A home warranty is a service contract that covers the repair or replacement of major systems and appliances when they break down. Coverage varies by policy, but most plans cover electrical, plumbing, heating, air conditioning, and appliances. Optional add-ons can include pool and spa equipment, roofing, and code protection.

When something covered fails, the warranty company sends a service technician. The homeowner pays only the policy deductible — typically between $65 and $100 per claim — rather than the full repair cost. For a buyer who's just spent everything they have on a down payment, that's a meaningful safety net.

Why sellers should consider offering one

The practical case is simple: nervous buyers close. A buyer who's worried about what might go wrong after settlement is more likely to ask for repair credits, drag out negotiations, or walk away from a deal that would otherwise have been fine. A home warranty limits their exposure to a known, small number — the deductible — and removes a layer of anxiety from the transaction.

In competitive situations where two similar homes are priced close to each other, a seller-paid warranty can be the detail that makes one listing more attractive than the other. It's relatively inexpensive — typically a few hundred dollars — and it signals to buyers that you've maintained the home and aren't worried about what they'll find after closing.

The listing warranty benefit sellers often miss

Here's the part most sellers don't know: many warranty companies offer a free listing warranty that covers the seller during the time the home is on the market. If the furnace fails during a showing or the water heater gives out the week before settlement, the listing warranty covers those repairs rather than the seller paying out of pocket. That can save hundreds of dollars and prevent the kind of last-minute problem that derails a closing.

It's worth asking about when you list — and it's one of the things I bring up early in the process with my sellers.

What it doesn't replace

A home warranty is not a substitute for a professional home inspection. They serve different purposes. The inspection tells the buyer the condition of the home at the time of sale. The warranty covers what breaks down after closing. Both matter, and a buyer who waives an inspection because there's a warranty in place has misunderstood what they're getting.

The bottom line

For most sellers, a home warranty is a relatively small cost that removes a meaningful obstacle between you and a clean closing. Whether to include one depends on your specific situation — the age of your systems, how competitive your market is, and what a buyer is likely to be concerned about. It's a conversation worth having before you list.