Quick answer: In a real estate transaction, either the buyer or the seller can pay for a home warranty, and the cost is negotiable. Sellers often pay to protect themselves during the listing period and make the sale more attractive. Buyers may pay at closing to secure their first year of coverage. Some real estate agents cover the cost themselves as a gift to clients. Existing homeowners who aren't in the middle of a transaction can also purchase a warranty directly at any time.

Below is a breakdown of every scenario, along with what each party gains and what the coverage typically costs.

Who Typically Pays for a Home Warranty?

There are four common scenarios. Each one is a legitimate way to get coverage in place:

  • The seller pays. Usually at listing, sometimes at closing.
  • The buyer pays. At closing, folded into the mortgage, or shortly after moving in.
  • The real estate agent pays. As a client benefit and business gesture.
  • The existing homeowner pays. Directly, outside of any transaction.

Which one applies to you depends on where you are in the process and what you want out of the arrangement.

When the Seller Pays for the Home Warranty

Sellers are the party most likely to bring up a home warranty first. There's a strategic reason for it.

When a seller adds a warranty at the time of listing, they typically get two benefits. First, they receive coverage during the listing period itself. That's the stretch when the home is on the market, and something could still go wrong. If a system fails during a listing, the seller has some protection against the surprise repair bill.

Second, they hand the buyer a year of coverage at closing. That makes the listing more attractive. Buyers are notoriously nervous about post-purchase surprises, and a warranty in the deal quiets much of that anxiety. In a competitive market, it's a small line item that can shorten time on market and help protect the sale price.

Typical arrangement: the seller lists the home with the warranty attached and pays for the full plan at closing.

When the Buyer Pays for the Home Warranty

If the seller doesn't offer a warranty at listing, the buyer has a few options.

A buyer can request one during negotiations and ask the seller to cover it. This is common and often accepted, since it's a small line item compared to the size of the transaction. A buyer can also purchase the warranty themselves at closing, and in some cases, the cost can be folded into the mortgage depending on the loan program and the lender.

For a buyer, the appeal is straightforward. The first year in a home is when unfamiliar systems tend to reveal their surprises. A warranty can help make covered repair costs more manageable and predictable.

Many buyers also add upgrade coverage that extends beyond the standard plan. Common additions include refrigerator control boards, ice makers, oven and range interior parts, and other items that standard plans often omit.

 

When the Real Estate Agent Pays for the Home Warranty

In some transactions, the real estate agent pays for the home warranty out of their own commission.

There are two common reasons. Handing a client a full year of home protection at closing is a memorable gesture that can lead to referrals and repeat business. When a home warranty is in place, many of the system and appliance breakdowns are resolved seamlessly without a dispute involving the agent.

For the agent, it doubles as a client gift and a piece of business protection they wouldn't otherwise have.

Buying a Home Warranty as an Existing Homeowner

You don't have to be in the middle of a real estate transaction to get coverage.

Existing homeowners can purchase a home warranty directly from most warranty companies at any time. Payment plans are flexible. Annual and monthly options are both common, and coverage typically begins after a short waiting period.

A pro tip worth knowing: home warranties purchased as part of a real estate transaction are often priced lower than plans sold directly to existing homeowners. Many warranty companies, including APHW, offer a leniency period after closing that runs up to 30 days. During that window, new homeowners can still get real estate pricing on a full year of coverage instead of paying the standard direct-purchase rate. If you've just closed on a home and coverage wasn't included, put a reminder in your calendar before the window closes.

How Much Does a Home Warranty Cost?

Home warranty costs vary by plan, home type, and coverage level. Here's a general picture:

  • Direct-to-consumer plans: roughly $55 to $65 per month, or about $660 to $720 for a full year
  • Real estate transaction plans: roughly $475 to $825 for one year of coverage, depending on plan tier and home type
  • Optional add-ons: anywhere from $60 to $400 per year for items like pools, sprinkler systems, additional refrigerators, or premium feature packages

Deductibles typically run from $50 to $100 per claim. In general, lower monthly costs come with higher deductibles.

For APHW's current pricing across plans, visit our Home Warranty Pricing page.

Is a Home Warranty Required When Buying or Selling a Home?

No. A home warranty is optional in every state in the U.S. It isn't required by lenders, by homeowners' insurance companies, or by standard real estate contracts.

Even so, it's a common enough part of a transaction that most buyers, sellers, and agents at least discuss it. Whether it makes sense in your situation depends on how old the home's systems are, what your household budget looks like, and how much protection you want against surprise repair bills in the first year of ownership.

Can You Roll a Home Warranty Into Your Mortgage?

In many cases, yes. When a home warranty is paid at closing as part of the real estate transaction, the cost can sometimes be folded into the mortgage. Whether it's an option depends on the loan program, the lender, and how the closing is structured. Ask your loan officer during pre-approval if you're planning to try this route.

Making the Right Choice for Your Situation

A few quick rules of thumb:

  • Selling your home? Ask your agent about adding a warranty at listing. It's a low-cost line item that protects you during the sale and gives your listing a competitive edge.
  • Buying a home? Ask whether the seller is offering one. If not, request it in negotiations or plan to add it at closing. First-year coverage is often when the plan pays off the most.
  • Already living in the home? You can buy a plan at any time. If you just closed and coverage wasn't included, check whether you still qualify for real estate pricing before the leniency window ends.
  • Real estate agent? Talk to your Area Sales Manager about programs for risk mitigation for sellers and agents like ClientSecure or ListSecure. Both add value for you and your clients.

Every APHW plan includes something worth knowing about. When a covered item fails, you get to choose the licensed contractor you trust to handle the repair. That means someone whose work you already know, someone whose schedule can flex around yours.

Ready to Talk Coverage?

Whether you're listing a home, buying one, closing a sale as a real estate professional, or protecting the home you already live in, we're happy to walk you through the plan that fits.

Call 800.648.5006, visit aphw.com, or reach out to your APHW Area Sales Manager.