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The Role of Home Warranties in the Home Selling Process

Posted by steeldoorrealty on 05/04/2023
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Many factors impact the process of selling a home. The location of a home can significantly influence how easy it is to market it. And the type of roofing material used can even be a deal breaker. But, while these factors are well known, people often don’t realize the role of home warranties in the home selling process. Well, let’s fix that.

What is a home warranty?

A home warranty is a service contract that covers repairs and replacements. This contract usually
entails all the major home systems and appliances, including:

● Plumbing.
● Electrical systems.
● Water heaters.
● Garage door openers.
● Pool and spa equipment (if the home has it).
● Various appliances (refrigerators, dishwashers, ovens, microwaves, garbage disposals, etc.).

The idea is that all these systems and appliances are prone to everyday wear and tear. And that the homeowner shouldn’t spend a fortune every time something breaks down. You get a home warranty and full-year coverage for all the listed appliances and systems. Keep in mind that a home warranty doesn’t cover a full-scale renovation, even if it is needed for sale. It simply covers the maintenance costs.

The owner can call the home warranty provider when one of these systems or appliances breaks down. They will send a technician to diagnose the issue and inform you whether your warranty covers it (whether it is usual wear and tear). This is why it is necessary that the owner is fully aware of the details of your warranty. Warranty contracts can differ in coverage, both in the amount and duration. Therefore, it is important to have the right coverage for your financial situation and the appliances and systems you own. A homeowner that has suitable coverage can rest easy that no sudden home issue will financially derail them.

How much does it cost?

A basic home warranty usually costs between $300 and $600 annually. This, of course, depends on the size of the home and the number of systems and appliances. As we mentioned, the amount of coverage that you have can differ. So, you may need to pay between $700 and $1500 annually for a more substantial warranty.

Another thing to keep in mind is that certain warranty providers may charge extra fees. For instance, they may charge you for a service call when the technician visits. Depending on the provider and the outline of your contract, these fees can range between $50 and $125 per call. You should also be aware of deductibles. This is the money you will have to pay before the warranty steps in. These can range from $50 to $100 per claim. And you also might have to pay extra deductibles for each service request.

Understanding the role of home warranties in the home selling

So, with this in mind, what is the role of home warranties in the home-selling process? Well,
there are a couple of ways in which home warranties can improve the selling process, both for
buyers and sellers.

Attracting buyers

The first way home warranties affect the home selling process is by attracting buyers. All buyers wonder whether the systems and appliances in a home will work properly after they purchase it. Even if they properly inspect the home and try out all the appliances, there is still no guarantee that nothing will break a week or a month from purchase. Well, a home warranty provides that guarantee.

A home warranty is one of the best ways to make buyers fall in love with your home. If the buyer doesn’t have to worry about fixing the HVAC or replacing the refrigerator, they might be far more willing to buy a home. In certain situations, having a home warranty can be a determining factor between the two options. Even if the buyer doesn’t place much value in a home warranty, they definitely won’t be turned off by it. So, in essence, there is no reason not to get it. This market advantage is hard to overlook, regardless of where you are situated or what type of home you are selling.

Protecting sellers

Selling a home is often a stressful, financially strenuous process. And after you are done renovating and staging it, you likely don’t have much money left to work with. Therefore, once you start listing, you’d be happy not to worry about something going haywire. With a home warranty active, you can simply sit and wait for buyers to come.

If there is an issue, you won’t have to spend a nickel to solve it. Nor will you have to worry about it slowing down the sales process. As a seller, you can rely on the warranty provider to take care of everything if you have a home warranty. This helps you avoid having to deal with dissatisfied buyers. And it helps you by not having to look for repair professionals who can aid you in a short span of time.

Keep in mind that such repairs are not only tricky but also quite costly. Especially if you no longer live in the area where you are selling your home. For instance, if you lived in California but chose to pack up and settle down in Houston with experts, you would have to travel to California to ensure your home is properly repaired. So, not only would you have to pay for the renovation, but you would also have travel expenses to worry about.


Once you understand what it entails, it is easy to appreciate the role of home warranties in the home-selling process. For some people, it might seem like a substantial expense. Paying $500 (on average) every year might seem like a waste of money, especially if you are a DIY type of person. But, we believe having a carefree mind is worth any price. Furthermore, you should note that for that $500, you get a substantial market advantage when selling your home. No buyer out there won’t appreciate having paid a home warranty for the first months of living in the new home. And those that are used to having it might not even consider buying a home without it. Trust between buyers and sellers is challenging to achieve. And having a home warranty goes a long way in putting everyone’s minds at rest.

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