Who Pays for a Home Warranty Policy & Why?

Who normally pays for a home warranty policy when you’re selling your home?

When it comes time to sell your home, who do you think will pay for the home warranty? The answer like so many things is… it depends. Like so many things the home warranty coverage can be just one of the many items that’s negotiable between the buyer and seller.

However in reality it’s most often provided and paid for by the home seller as one of the benefits of perks of buying that home.  So if you’re a home seller, WHY would you want to pay for a home warranty?  First,  keep in mind providing a  warranty policy may help minimize the fear factor of a home buyer when it comes to buying a re-sale home.  Second, wouldn’t you rather have your home buyer call the home warranty company which something goes out, than call you?

The cost of the policy becomes an expense normally calculated into the seller’s side of the closing costs.  M0st policies charge a basic service call fee paid for by the home buyer after the closing  when a service provider makes a repair visit.

The levels and cost of coverage depends on the company,  the items covered and whether it single family home or a condo. It’s also important to note there are a lot of similarities in the basic coverage among the companies, there are also differences just like any other type of insurance, included yet to limited to optional items.

Optional coverage items could include:

  • Central Air Conditioning
  • Evaporative Cooler
  • Pool & Spa
  • Roof
  • Refrigerator
  • Washer & Dryer
  • Salt Water Pool/Spa
  • Wet Bar Refrigerator or Wine Cooler

The differences between the home warranty policy coverage could be similar to the differences between auto insurance coverages with different companies or a homeowner insurance policies. Therefore it’s important you read the limits of coverge when considering a policy.

Also check with your REALTOR, some companies are known to have better customer service than others.  Policies are typically written for a period of one year and often buyers can and renew on their own  a year at a time afterwards.

Written by Class Instructor: Lynda Eisenmann

I maintains an active residential re-sale brokerage in Brea, CA, located in Orange County, about 20 minutes north of Disneyland. Contact Lynda directly at (714) 595-1494, or Lynda@PreferredHomeBrokers.comCA License #00402040

This article has 3 comments

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