Who Pays for Home Warranty Buyer or Seller?

Erin Easley

Written By Erin Easley

Published 03/12/20
Who Pays for Home Warranty Buyer or Seller

When deciding who pays for home warranty plans in the sale of a house, there are several different factors taken into consideration. Each home sale differs, and the prevailing practice may vary depending on the area as well.  It is often the seller that offers a home warranty when selling a house as an incentive. There are situations that a request is made by the buyers for a home warranty be included to close the deal. This is when a buyer’s motivation versus the seller’s motivation will come in to play.  

Another factor of who pays for home warranty buyer or seller can be the age of the house, the appliances, the electrical, and the plumbing systems. An older house that has been updated with all new appliances, a new roof, updated electrical and plumbing, the seller’s offer for a buyers home warranty plan could be what influences a buyer to make a bid on the property or not. Or a seller may transfer any manufacturer’s warranty of those updated items over to the buyer and not offer a home warranty plan.

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The Benefits For The Seller To Offer a Home Warranty

A seller can expect some benefits by offering a home warranty during closing process, with the first one being that it can often make a house more attractive if similar houses in the area are not offering one. It is estimated that approximately 80% of all homes on the market have a home warranty plan included in the sale and is paid for by the seller. Home warranty plans are sometimes gifted by either real estate agent as a housewarming gift for the buyer.  

The jest of this upgrade is to give a buyer reassurance that if there are any issues or problems with the house after the closing, they have help to repair or replace those things. This can save a buyer hundred, even thousands, of dollars with major things like the HVAC system, any kitchen or laundry appliances that were sold as part of the house, the septic system, etc. Knowing that a home you just purchased is covered by a home warranty can give you peace of mind as a buyer and as a seller, you have a peace of mind that the chance of a sale coming back on you in the form of a lawsuit is less likely to happen.

Should a Buyer Purchase a Home Warranty Plan?

As a buyer, the purchase of a home warranty provides peace of mind as soon as the closing has completed. Most home warranty plans are valid for one year and cover any repair or replacement of items within the plan that was not discovered during the engineer or structural inspections. For a relatively small amount of $300 to $500, depending on the coverages you choose, compared to the expense of repairing a refrigerator or replacing the HVAC system, a home warranty plan is ideal for a home buyer.

Home Warranty Plans For A Rental Property Makes A Landlord Life Easier

If you are buying a property as an income property, meaning that you’ll be renting the property, then a home warranty for rental property is ideal. This can often eliminate surprise expenses and makes it easier for prospective tenants to know that the appliances and systems are covered should something breakdown or have issues. As a rental property owner, you can know that once you have received a phone call from a tenant, you only need to make one phone call to get the issue resolved with only a minimal service call fee, usually $50 to $75, and your tenant is taken care of easily and quickly.

a>, updated electrical and plumbing, the seller’s offer for a buyers home warranty plan could be what influences a buyer to make a bid on the property or not. Or a seller may transfer any manufacturer’s warranty of those updated items over to the buyer and not offer a home warranty plan.

The Benefits For The Seller To Offer a Home Warranty

A seller can expect some benefits by offering a home warranty during closing process, with the first one being that it can often make a house more attractive if similar houses in the area are not offering one. It is estimated that approximately 80% of all homes on the market have a home warranty plan included in the sale and is paid for by the seller. Home warranty plans are sometimes gifted by either real estate agent as a housewarming gift for the buyer.  

The jest of this upgrade is to give a buyer reassurance that if there are any issues or problems with the house after the closing, they have help to repair or replace those things. This can save a buyer hundred, even thousands, of dollars with major things like the HVAC system, any kitchen or laundry appliances that were sold as part of the house, the septic system, etc. Knowing that a home you just purchased is covered by a home warranty can give you peace of mind as a buyer and as a seller, you have a peace of mind that the chance of a sale coming back on you in the form of a lawsuit is less likely to happen.

Should a Buyer Purchase a Home Warranty Plan?

As a buyer, the purchase of a home warranty provides peace of mind as soon as the closing has completed. Most home warranty plans are valid for one year and cover any repair or replacement of items within the plan that was not discovered during the engineer or structural inspections. For a relatively small amount of $300 to $500, depending on the coverages you choose, compared to the expense of repairing a refrigerator or replacing the HVAC system, a home warranty plan is ideal for a home buyer.

Home Warranty Plans For A Rental Property Makes A Landlord Life Easier

If you are buying a property as an income property, meaning that you’ll be renting the property, then a home warranty for rental property is ideal. This can often eliminate surprise expenses and makes it easier for prospective tenants to know that the appliances and systems are covered should something breakdown or have issues. As a rental property owner, you can know that once you have received a phone call from a tenant, you only need to make one phone call to get the issue resolved with only a minimal service call fee, usually $50 to $75, and your tenant is taken care of easily and quickly.

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