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Home /  Home Buyers / A Guide to Home Buyer’s Warranty
last_updated_date Last updated: January 19th, 2023

What is a home buyer’s warranty?


A home buyer’s warranty is a protection plan for critical home systems and appliances that break down due to everyday wear and tear, aging or mechanical malfunctions. A convenient means to deal with unexpected repair costs, a home buyer’s warranty is usually meant for home buyers. However, home sellers and realtors also purchase these plans to incentivize the buyers. These plans have to be purchased within 30 days of closing.


A home buyer’s warranty may serve as a buying incentive for many other reasons. Read on to find out more on these reasons, how it works, the coverage and costs, and the common questions that one has about buyer warranties.

Why choose a home buyers’ warranty?

When a home system or appliance breaks down, it can be inconvenient and expensive to fix. For instance, an HVAC replacement could cost over $5000. An unexpected breakdown could also jeopardize the closing of the sale.

Even if a home inspection certifies everything to be in good working condition, there is always a chance that an aged item may malfunction. So, a home warranty can act as a backup here. Many people purchase a home warranty plan when buying a pre-owned home or ask the seller to get them a home warranty policy.

It can be a wise investment for the following groups of people:


Home Buyers

After paying the closing costs, the last thing a buyer wants to do is spend extra money on repairs. A home buyer’s warranty can save the buyer from out-of-pocket expenses due to unexpected breakdowns of major home systems and appliances. With such services at their call, buyers feel confident that they have added extra protection to their homes.

Selling a home can be very stressful. So, a home warranty helps sellers by making the home market-ready. The seller can be assured that if any covered system or appliance breaks down during the closing process, he would not need to pay for the fix. The service provider will send out a professional to resolve the issue.

A real estate agent may use a home warranty as a marketing tool to make homes attractive to the potential buyers. Sometimes they even toss one in for free. This assures clients that they are receiving a good deal for their homes.

How does a home buyer’s warranty work?

Most buyers tend to choose the same home warranty plans that are available to homeowners. However, some companies also offer buyer-specific warranties that can also be considered. Here are the steps to choosing a good buyer’s warranty plan and using it:

sign_symbolOpt for a home inspection

After you enter the contract process to buy the property, get a home inspection done. It is an important part of the home buying process, as it helps determine any pre-existing conditions in the house. This way, a buyer can ask the seller to fix the problems before taking responsibility for the upkeep.

sign_symbolChoose the right home warranty plan

Do your research into the home warranty companies. You can ask your friends, real estate agents, and also check out reviews from fellow buyers. To get a suitable plan, it is recommended to request a quote from top home warranty companies and carefully go through the sample service contract before purchasing it.

sign_symbolFile a claim

After purchasing a home warranty, there is usually a waiting period of 30 days before coverage kicks in. If any of the covered home systems or appliances break down, a claim can be filed after this period. To file it, contact the service provider. Generally, companies have 24/7 phone lines or online forms for claim filing.

sign_symbolPay the service call fee

Once a claim is submitted, a small deductible is needed to pay to get the repair done. The deductible usually ranges between $60 to $125.

What does a home warranty for buyers cover?

A home buyer’s warranty plan covers the following major home systems and appliances:


Electrical system

HVAC system




Washing Machine


Water Heater


Plumbing system

However, depending upon the company and their plans, there can be more items offered as optional add-ons at some extra cost such as:



Swimming Pools

Roof Leaks

Stand Alone Freezer

Second Air Conditioner

How much does a Buyer’s Home Warranty Cost?

The cost of a home buyer’s warranty varies according to the selected plan, number of units covered, optional items added, area, and the type of residence (single-family homes, multi-family homes, mobile homes, condos/townhomes). Generally, for a single-family home, the cost ranges between $400-$600 annually. The cost for multi-family homes, on the other hand, starts from $800 and goes up to $2,000 annually, depending on the coverage details.

To know the specific pricing details, get your free quote here.

Best Home Warranties for Buyers

There are numerous home warranty companies offering extensive coverage, lower deductibles, 24/7 customer support, high payouts, and excellent services. To help you make a decision, here is a list of top home warranty companies for buyers:

ServicePlus Home Warranty

Rating starRating starRating starRating starRating star
24/7 available online customer portal
90 days parts guarantee
Top class technicians

Offers – $200 off & 2 Months Free


Select Home Warranty

Rating starRating starRating starRating starRating star
Extensive and experienced contractor network
Low service call fee
Offers system coverage of $2000

Offers – $150 off +free roof coverage + 2 months free


Higher coverage caps
Options on deductibles
Available in 49 states

Offers – Multiple Property Discount ($50 off) + Referral Discount ($25 Gift Card) + $50 Realtor Discount

Final word

A home buyer’s warranty can be beneficial in many ways. Buying a home can be nerve-racking for buyers, so if a seller offers a home warranty to potential buyers, it provides additional peace of mind to them. It may reduce a buyer’s potential home maintenance costs in the initial year of homeownership. It assures that if any covered system or appliance breaks down, the service provider will take care of that issue. They can call professionally qualified service contractors and get quality repairs.

Frequently Asked Questions (FAQs)


How is a home buyer’s warranty different from a homeowner’s warranty?


A homeowner warranty plan is for people who already own a home and are not purchasing or selling at that time. On the contrary, a homebuyer’s warranty is for people who are buying or have recently bought a property. The main difference between the two is that of coverage and pricing. Home buyers’ warranty is less expensive than homeowners’ warranty.


Is it different from home insurance?


Yes, a home buyer’s warranty is different from home insurance. A home insurance policy protects homes from natural disasters, fire, etc. A home warranty will cover the repair costs of home systems and appliances wearing out with age.


Who pays for home warranty- buyer or seller?


Generally, sellers pay for the first year of the warranty. It benefits both parties, as sellers get a better chance to close a deal. However, a buyer can also pay for the warranty, if the agreement has such a clause. To know more specifics, check out this article.


How soon can you use a home warranty after purchase?


After purchasing a home warranty, there is a waiting period. You can start using the warranty after it ends. The waiting period varies from company to company, but mostly it is 30 days.


Which types of problems are least likely to be covered by a home buyer warranty?


A home warranty will cover all the possible major systems and appliances that break down due to usual wear and tear. However, the following things are typically disqualified under the coverage:

  • Cosmetic issues
  • Damage due to improper installation
  • Misuse of any system or appliance
  • Pre-existing conditions
  • Lack of maintenance or neglect

Do all new homes have a warranty?


Most new homes come with a builder’s warranty which might last for as long as ten years. It covers workmanship, and specific parts of the home like windows, HVAC, plumbing, and electrical systems.


If I give a buyer a home warranty and take a seller rider, what am I as the seller responsible for?


If you choose to add a seller rider to your agreement, your responsibilities will be as negotiated between you and the buyer. You may include some additional agreements containing your declarations that after closing, the costs of certain repairs or replacements will be limited to a specific amount.


Which is better to offer a buyer – a home warranty or building inspection report?


Offering a home warranty to a buyer might be a good decision. Since it will enhance the chances of sale of the property.


How long does the home warranty program protect a buyer after the move?


The length of the home warranty program varies according to the selected plan and the company’s terms and conditions. However, most plans usually last for a year.


Is a home warranty required to close a sale?


A home warranty surely helps to close a deal of any property, but it is not typically required. A seller can close the sale of the house without it.


How and when to transfer a home warranty?


If you are selling your home, you can transfer your home warranty policy. To do so, you need to contact the service provider and inform them about the new homeowner. Every company has their terms and conditions regarding transferring warranties. Some companies even charge a nominal transfer fee to complete the process. So, before making changes, we recommend going through the sample contract.


How to cancel a buyer’s home warranty?


If the buyer opts not to choose the home warranty during the closing, it automatically gets canceled with no cost to the seller. However, if the buyer wants to cancel the warranty after moving, he can contact the service provider to do the same. Some companies may charge a cancelation fee to carry out the process.


Is offering a home warranty to a buyer worth it?


Offering a home warranty to a buyer can be worth it due to many reasons. A home buyer’s warranty may be cheaper than a home owner’s warranty. It saves the new home buyers who are out of cash. The new home buyers can skip the search for the repair contractor. So, eventually, their homes can function smoothly.

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