Who pays for a home warranty? | America's Preferred Home Warranty Skip to main content

Who pays for a home warranty?

America's Preferred Home Warranty, Homeowner Tips

Have you ever wondered who pays for a home warranty, or how it’s paid for? There are several possibilities.

At closing

When you buy or sell a home, real estate agents regularly offer a home warranty for consideration, as a complement to your homeowners insurance. While the benefits of a home warranty differ between sellers and buyers, either party can cover the cost of the warranty at closing.

For example, a homeowner who lists their home for sale (seller) may include a home warranty at listing. This provides the seller with some limited coverage against failures that may come up during inspections, while also setting up their buyer with a year or more of protection against unexpected home system or appliance expenses, providing an incentive to buy.

If the seller chooses against providing a home warranty at listing, however, the buyer may elect to add one at closing—either paying up front or folding the cost into their new mortgage. The buyer may also be able to convince the seller to purchase one as part of their agreement.

Lastly, there are some occasions where real estate professionals will pay for a home warranty out of their own pockets, for sellers who agree to list with them. This creates protection for both their seller and their future buyer, as well as developing a mutually beneficial professional relationship.

Looking to sell your home? We strongly encourage you to inquire with your real estate agent about a home warranty. Not only could it save you a headache, but statistics show it can also increase the selling price of your home, putting more money into your pocket.

After moving day

If you already own your home (but want a home warranty), you can still get one. Many home warranties offer both annual and monthly payment plans—you need only inquire with the company.

Pro Tip: Home warranties purchased through a real estate transaction are often less expensive than those purchased directly by homeowners. Many home warranties offer a leniency period after closing (typically up to 30 days) in which you can still get the lower real estate pricing for a full-year home warranty, rather than paying the higher monthly rates. If you’re considering getting a home warranty after closing, put the cutoff deadline in your calendar to ensure you don’t miss out on those savings.

Whatever you choose, be sure to thoroughly read and understand the terms and conditions of your contract. Not all home warranties are the same, though most will be happy to answer any questions you may have.