Who Pays For A Home Warranty

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Who Pays for a Home Warranty, the Buyer or the Seller?

When you buy a home there is one thing that you can count on; you will want to obtain a home warranty. Buying a house is a huge, life-changing event, and the added cost of a home warranty makes many new homeowners cringe.

Obtaining a home warranty doesn’t necessarily mean that you’re going to have to pay for it, though. Depending on certain conditions, the home warranty might be paid for by the sellers instead of buyers.

Who is paying for the home warranty?

There are three main things to consider when determining whether the home warranty will be paid for by the buyer or the seller

1. The most common practice in your area

Wherever the home is being purchased, there will be basic market trends that will likely be closely followed. Sometimes the local trends show that it is a common practice for sellers to purchase the home warranty for the buyers.

If that is the case in your area, then it is a good indication that the seller will likely purchase the home warranty. Of course, the seller is free to go against the trend, but in order to be competitive, most of them won’t. If most sellers in your area are buying home warranties for the buyers, then your seller will most likely buy yours for you.

2. The motivation of the seller

How motivated the seller is to get their house sold is another indication of whether or not they will purchase the home warranty. If the seller is chomping at the bit to get their house sold quickly, they’ll probably throw the home warranty in as a perk to make their house look even more appealing.

Another consideration is that if the seller isn’t that motivated, they could actually decide to go against their local market trends and not purchase the home warranty. A motivated seller often has a lot to offer to make their property look great, but an unmotivated one doesn’t care enough to go that extra mile.

3. Home details

There are a number of factors about the property in question that could influence the seller to purchase the home warranty for the buyer. These include the age of the home, the age of the appliances, as well as the age of the systems.

If some or all of those things are getting along in their years, there is a good chance that the seller will throw in the warranty, as long as they’re motivated. If the seller isn’t going to purchase the warranty, then the buyer will most likely want to buy one themself if the house and the appliances are on the older side.

How it Helps the Seller to Purchase the Home Warranty

If you’re selling a house, it might be a good idea to consider purchasing the home warranty for your buyers. Many buyers consider it a perk to have their home warranty purchased for them, and if you’re willing to do it, your home will look even more appealing to buyers than it already does.

The reason that buyers care so much about having a home warranty, is that buying a house is a huge deal and a huge expense. There are no guarantees that things are going to last once the house closes.

Having a home warranty provides peace of mind for buyers that if things begin to fail after closing, they have options, they have help, and they won’t be stuck dishing out thousands of dollars in their new house to get things fixed.

Another benefit of the seller buying the home warranty is that when they buy the warranty while the house is still on the market, their home will be covered during that time.

So, if an appliance in your house breaks while you’re trying to sell it, the home warranty will cover it. That way, you won’t be out a ton of money right when you need it most, and you’ll be able to ensure that the home is maintained so that it looks great.

Buying the home warranty when you are selling your house provides you with peace of mind, knowing that the appliances and systems are covered during this process, and that your buyers will be able to take on the house without any trouble.

How it Helps the Buyer to Purchase the Home Warranty

If you’re buying a house and the seller isn’t purchasing a home warranty, sometimes the real estate agent will buy the warranty for you as a gift for purchasing your home. However, if neither the seller nor the real estate agent is purchasing the warranty, you should strongly consider doing so yourself.

There are a number of benefits of having a home warranty. Having peace of mind when you are buying a house is of the utmost importance. The last thing that you want to worry about is closing on your house and having things break down and fail. That can spell financial disaster for just about anyone.

When you have a home warranty, you can breathe easy knowing that your appliances and systems are covered should anything fail. You can close on your house in peace, without concern about things working properly.

While it will cost you a bit more out the door, typically $300-$600, having protection and coverage for the important details of your new home makes it all worth it. Obviously, you’d prefer if the seller or your real estate agent bought the home warranty for you, but if they don’t, you will probably want to purchase one yourself.

Home Warranty Coverage

Many home buyers don’t immediately understand the benefit of obtaining a home warranty. They think that since they will have homeowners’ insurance, they won’t need the warranty. However, homeowners’ insurance and home warranties actually cover different things.

Most homeowners end up making claims on their home warranty more often than on their insurance, especially in the first few years of homeownership. The things covered by the home warranty make it clear that having one will very likely come in handy.

The home warranty is a service contract that covers the appliances and systems in your home that could potentially fail, including:

  • Oven
  • Range
  • Air conditioning
  • Garbage disposal
  • Furnace/heat
  • Dishwasher
  • Water heater
  • Electrical systems
  • Ceiling fans
  • Plumbing stoppage
  • Telephone wiring
  • Ductwork

Appliances such as refrigerators and washers and dryers tend to be optional coverage that you can often purchase at an additional cost. Once you obtain a home warranty, you should be able to make a claim and only have to pay a small service fee. Then, your home warranty company will cover the cost for your repairs or replacement.

This is why obtaining a home warranty is essential, no matter who pays for it. Whether paid for by the buyer or the seller, a home warranty is important in order to ensure that the new home is going to be well taken care of.

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