When you’re listing your house for sale, you may wonder what you can do that will help your home sell faster and for the best price possible. There are several things you can do that will influence the success of your sale, and one of those things is including a home warranty. Many new construction communities include home warranties with the purchase of a newly built home, which can make buying an older home with no warranty seem more intimidating for buyers. Here’s a guide to offering a home warranty when selling.

What is a Home Warranty?

A home warranty is a protection plan for the buyer that extends for one year after the purchase of a home in the event that major systems or appliances malfunction or break.

A home warranty is not the same as homeowners’ insurance.

A home warranty will cover items such as dishwasher, water heater, air conditioner, garbage disposal, and built-in microwave ovens, among other appliances if they break within the first year of new ownership, under certain circumstances. Homeowner’s insurance, on the other hand, doesn’t typically cover a home’s appliances or mechanical systems. Instead, homeowner’s insurance usually provides protection against damage caused by accidents, crime, natural disaster, or fire. In fact, not all natural disasters or weather-related incidents are covered by homeowner’s insurance, either, so a separate policy for flood insurance is required in some areas.

Homeowner’s insurance is mandatory for homeowners, particularly those with home mortgage loans. Home warranties, however, are optional and are not standard inclusions with resale real estate. This is why including a home warranty with the sale of your home may provide peace of mind and an added selling point for buyers considering purchasing your house.

How Much does a Home Warranty Cost?

In its most basic form, a home warranty may cost a seller between $300 and $500 for a year’s worth of protection from the date the home is sold. However, each company, and each plan within those companies, varies. As with most policies and warranties, there are upgrade options and additional protection you can purchase that will alter the price of your plan. Although it may seem like a hefty chunk of change to pay out-of-pocket before the sale of your property, you may find a healthy return on investment when your house sells lickety-split and for top dollar.

Buyers, especially those who are buying their starter home, may have concerns about purchasing properties that have been used by others. This is exponentially true with older homes. The older a house is, the more concerns there are that problems may lay in wait beneath the surface. There’s comfort in knowing that with most of your day-to-day purchases, the return of a product along with a receipt and an explanation can relieve the buyer of expensive imperfections. American society is accustomed to exchanges, returns, and refunds – but that’s not the case in real estate. There are horror stories of buyers purchasing a house they thought was ideal only to discover plumbing, electrical, roofing, or structural damage.

There are also programs available for sellers designed to provide a warranty only if the home sells, wherein the premium is due upon close of sale so there’s no out-of-pocket expense for the seller, and no need to purchase the warranty if the deal falls through.

Do You Need a Warranty if You Have an Inspection?

An inspection verifies that all systems seem to be in good order at the time of sale. However, inspections are not always able to predict a problem in the making, one that’s been brewing for a while that has yet to reach its breaking point. But sixty days after the title is transferred, that breaking-point might be reached, and the warranty will protect the new owner against a problem that had been developing since before the sale of the property.

Warranties Protect Sellers, Too

Purchasing a home warranty to include with the sale of your house isn’t just a marketing ploy to encourage buyers to take action. A home warranty can also offer peace of mind and protection to the seller.

It is not unheard of for a buyer – or buyer’s attorney – to contact the seller months after the close of the transaction because of faulty items or systems in the house. Even though you may have offered a full seller’s disclosure statement and passed a home inspection, you may still be held liable for pre-existing problems with the property. A home warranty could protect your interests after your house is sold.

How a Home Warranty Works

One of the most important aspects of a home warranty is in understanding what’s covered and what isn’t. You may also need to brush up on policy terms for conditions that could void the policy or nullify coverage.

Any appliance covered by a manufacturer’s warranty is not covered by a home warranty. Gather all of the paperwork for your home’s appliances. Determine which items may still be under manufactures warranty, and which qualify for coverage under a home warranty.

All appliances and systems covered must be regularly and routinely cleaned an maintained. Failure to service appliances regularly could prevent their coverage. Gather all receipts and paperwork regarding maintenance or repairs for each item to be covered in the warranty. Appliances that are too old may need to be updated before they qualify for coverage in a home warranty.

When a covered item malfunctions within the first year of coverage, the new homeowner calls a service provider who is authorized through the warranty company. The homeowner or warranty holder pays the service fee for the contractor to arrive, but not for services provided. There’s a $50-$75 deductible for repairs, but that’s a drop in the bucket compared to the out-of-pocket expense of paying for service, parts, and labor. When your claim has been satisfied and repairs made, take the time to review the contractor on the warranty provider’s website. This helps ensure high-quality service providers for warranty holders.

A Home Warranty is Not an Excuse

Before investing the expense of a home warranty to include with the sale of your house, take the time to make sure your home and all of its systems and appliances are in good order and that everything is well-maintained. A warranty only covers what’s in good condition and well-serviced. It is not acceptable to use a home warranty as an excuse to try to sell your house with faulty systems. If you know something is broken, fix it. If you suspect something might be broken soon, be preemptive and repair it before it becomes a problem.

Even with a warranty included in the offer, if your home inspection reveals problem areas with your property, your deal may be up for negotiations, you may find yourself doing last-minute expensive repairs, or – worst case scenario – the deal could be broken, nullified because of poor condition of property.

Research Required | Not All Companies Are Worthy

You can get a home warranty from a variety of places including insurance companies, banks, and businesses that specialize in home warranties. As with any industry, there are companies who are on the up-and-up that provide high-quality service, and there are businesses who are shady, earn bad reputations, or don’t deliver what they promise. Do your research to find out which home warranty company may be best for you.

Chances are, your real estate agent can recommend a home warranty provider. In fact, your professional real estate agent is an excellent resource for answering any questions you may have about using a home warranty as a marketing tool to expedite the sale of your home while increasing its perceived value.

When you’re researching warranty providers, thoroughly investigate what is and isn’t covered. Make sure the terms are crystal clear, in writing, so there’s no room for misunderstanding. You’ll compare prices between companies, but you’ll also gauge what systems and appliances qualify for coverage, deductibles, exclusions, and other pertinent information. Narrow your list of providers down to those whose terms and coverage are both clear and affordable.

Using a Home Warranty as a Negotiation Tool

Not only can a home warranty be a good draw to attract buyers who may have concerns about investing in an older home, but can also be used as a tool in negotiations. You may opt to remove the warranty in a counter-offer, or re-add the warranty as a bonus for a negotiation in your favor. Your home warranty doesn’t only need to be a marketing tool, but can also be used to tip the scale in negotiations.

It’s Nice, but Not Necessary

There are those (though not your agent, likely!) who will tell you that purchasing a home warranty to include with the sale of your home is a waste of money. Why spend $400 to provide coverage for someone else? Think about this. In traditional real estate sales, the buyer pays closing costs which include services such as inspections to verify the condition of the home, appraisals to attest to the current market value of the property, and a survey to determine the property lines and living space of the house. The buyer traditionally pays closing costs because the services apply to what will be that buyer’s property. So why should the seller pay for the warranty?

The truth is, no one says the seller should pay for a warranty. To clarify, many professional real estate agents suggest that sellers obtain a home warranty as a way to sweeten the pot for potential buyers. But there’s no requirement. You can opt out. But, when you realize that the investment of a few hundred dollars could result in a sale price that’s increased by thousands, you may find the idea more enticing.

The Message You’re Sending with a Home Warranty

When you include a home warranty with the sale of your home, you’re re-assuring the buyer that you’re not abandoning them, leaving them holding the bag, or allowing them to foot the bill alone if something goes wrong with the house. You also demonstrate to the buyer that you care about the condition and quality of the property, which means the property has probably been given the attention it deserves to stay in good working condition.


There are some things you must do as a homeowner when listing your house for sale. You’re required by law to provide full seller’s disclosure, meaning you state in writing any claims made against the property, or any outstanding problems with the house. Before listing, sellers should repair and replace any broken, faulty, or malfunctioning items in the house. Remember, any imperfections will be revealed by a home inspection which could delay or derail the transaction. With the guidance of your realtor, you’ve set a competitive asking price for your home. Staging presents a house that is clean, project-free, and move-in ready. With the price right, the house prepped, and all systems in good order, you can give yourself an added edge by choosing to include a home warranty with the sale of your home. When you include a home warranty with the sale of your home, you’re providing both buyers and yourself with the comfort and peace of mind of knowing that any problems that arise will be handled efficiently, and not left for the new owner to handle alone.

Talk with your real estate agent about the possibility of including a home warranty with the sale of your home. Not only will your real estate agent be able to answer your questions and provide advice about home warranty coverage, but he or she may also be able to refer you to a reputable, affordable home warranty company. And don’t worry, you might be able to find the perfect home warranty to include with your sale without ever having to pay a penny up front out of pocket.

Call Rene Burchell today at 469-877-3303 to tour available houses for sale in Frisco and surrounding areas.

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