Short answer
A seller's home warranty can cover covered systems and appliances while the home is listed, and some sellers buy a plan for the buyer as a closing concession. It may reduce surprise repair costs during the sale and reassure some buyers, but it doesn't protect you from disclosure obligations, inspection findings, or problems the contract excludes.
Two ways sellers use home warranties
Home warranties come up for sellers in two distinct situations, and it helps to keep them separate:
- Coverage for you while the home is listed. Some providers offer coverage that applies during the listing period, so a breakdown before closing doesn’t become an unplanned expense or a sticking point.
- A plan for the buyer. Some sellers pay for a plan that begins at closing and covers the buyer for a set term, often as a concession in negotiations.
Some plans combine the two: coverage for the seller during the listing period that then continues for the buyer after closing. Whether this is available, and on what terms, varies by provider and state.
Listing-period coverage
If a covered system or appliance fails while your home is on the market, a listing-period plan may pay toward the repair, minus the service fee and subject to the contract’s caps and exclusions. That can help you avoid an unexpected bill at an inconvenient time and keep the home in working order for showings and inspections.
Things to check:
- What it covers. Listing-period coverage may be narrower than a regular plan. Read the covered-items list.
- When it starts and ends. Coverage may begin at listing and end at closing, or switch to the buyer at closing.
- What if the sale falls through. Contracts differ on what happens if the home doesn’t sell or comes off the market.
- Pre-existing conditions. Problems that existed before coverage started are commonly excluded.
Offering a warranty to buyers
Some sellers offer to pay for a buyer’s plan. Reasons include:
- Reassurance for buyers, especially for an older home or one with original systems.
- A negotiating tool. A plan can be one concession among others when a buyer asks for something after inspection.
- Fewer post-sale disputes. A plan gives the buyer a route for covered breakdowns after closing. It doesn’t settle disputes about problems you knew about.
Whether a plan helps a particular sale is a judgment call, and real estate professionals in your area may have a view on local expectations. A plan may matter less to buyers of new or recently updated homes.
Who pays, and how
Payment arrangements vary. Commonly, the seller pays for a buyer’s plan at closing, the cost appears on the closing statement, and coverage starts at closing. Listing-period coverage may be paid separately or bundled into the buyer’s plan. Confirm the arrangement in writing and make sure the plan tier and term are clearly stated in the purchase paperwork.
What a warranty does and doesn’t protect
| A home warranty may help with | A home warranty does not |
|---|---|
| Covered breakdowns from normal wear during the coverage term | Replace your legal duty to disclose known defects |
| Arranging a technician for covered items | Cover items or failures the contract excludes |
| Reducing surprise repair costs, minus the service fee and above any caps | Fix problems found in the buyer’s inspection before closing |
| Giving buyers a route for covered post-sale breakdowns | Act as homeowners insurance for damage like fire or storms |
Disclosure still applies
Seller disclosure rules vary by state and are separate from any warranty. A plan doesn't change what you're required to disclose. For questions about your obligations, talk to a real estate attorney or licensed agent in your state.
When a seller’s plan may not be worth it
A plan may add little if the home is new or recently renovated, its systems are under manufacturer or builder warranties, or buyers in your market don’t expect one. A price adjustment or a specific repair may address a buyer’s concern more directly than a warranty would.
Next steps
- Ask any provider for the sample contract covering both listing-period and buyer coverage, and read the exclusions.
- Compare plans with our comparison worksheet.
- Share our guide for buyers with buyers who want to understand the plan you’re offering.
- Check what’s offered where you live on our state pages.
This page is general education, not legal, financial, or insurance advice. Home warranty terms vary by provider, plan, and state; the contract you sign controls what is covered. Spotted an error? Request a correction.
