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Is the Home Warranty Always Included in Closing Costs?

Real Estate Professionals

Article

5 minutes

Is the Home Warranty Always Included in the Closing Costs?

AHS Editorial Team

November 05, 2025

Home warranties aren’t automatically included in closing costs—but they can be. Typically paid for buy the seller, adding a home warranty gives buyers peace of mind and adds extra value to the deal.

In this article:

Who pays for the home warranty at closing?

What does a home warranty cover?

How much is a home warranty?

Why purchase a home warranty?

How to shop for a home warranty

Key takeaways

Home warranties aren’t legally required as part of closing costs. They’re optional and negotiable. 
Either the buyer or seller can pay for a home warranty, depending on what’s agreed during the sale.  
You can still purchase a home warranty after closing, even if it wasn’t included in the transaction.

Who pays for the home warranty at closing?

One of the most common questions in real estate transactions is: who pays for the home warranty, the buyer or the seller? The short answer is: it depends.

Sometimes a home warranty is included in the closing costs of a real estate transaction. Both buyers and sellers have closing costs, but buyers often cover the bulk of them unless they negotiate for the seller to contribute.

In some cases, the seller pays for the home warranty at closing as a buyer incentive. It’s an easy way to sweeten the deal, especially on older homes, and can help protect the seller from post-sale disputes if part of a system or appliance breaks down after move-in. Nevertheless, if you’re still wondering who pays for a home warranty in your own transaction, know that this can usually be negotiable between the buyer and the seller.

And if a warranty isn’t part of your closing deal? You can still purchase one separately after the sale wraps. For American Home Shield, buyers have up to 90 days after their sale to purchase a real estate home warranty. And, if 90 days have passed, you can still protect your home by purchasing a warranty directly, separate from closing.

entering with moving boxes

What does a home warranty cover?

If you’re considering a home warranty at closing, it helps to know what you’re actually getting. A home warranty is a service plan agreement—not insurance—that helps pay for covered repairs and replacements to parts of systems and appliances that break down from normal wear and tear.

American Home Shield® plans may cover parts of:

Heating and air conditioning (HVAC) systems
Electrical systems (including wiring, outlets, and switches)
Plumbing systems (pipes, leaks, stoppages)
Major appliances like refrigerators, ovens, and dishwashers
Washers, dryers, water heaters, and ceiling fans

Add-on coverage is also available for roof leak repair, pool and built-in spa coverage, septic systems, and home electronics*, and more**.  

See the plan agreement for coverage details, including service fees, limitations and exclusions. Coverage limits and charges for non-covered items may apply.

How much is a home warranty?

The cost of a home warranty to the seller depends on the provider, home size, and type of coverage.

No matter the precise cost, it’s still a relatively low-cost incentive when you consider the added buyer confidence it can provide, especially if you're selling an older home. The home warranty cost to the seller is often a small investment when weighed against the potential benefits of securing an offer and avoiding last-minute negotiations over who pays for the home warranty.

For buyers, home warranties deliver value beyond the price tag. plans are available for purchase after closing as well, with monthly payments typically ranging from $30 to $70 (and the cost of the service fee) depending on the plan type, plus the option to add specialty coverage (like roof leak repair or second refrigerators). For that potentially modest cost, buyers gain peace of mind knowing they won’t face unexpected, covered repair bills alone, an especially important budget safety net in the first year of homeownership.

Whether you’re the buyer or seller, a home warranty is often a small upfront cost for a lot of long-term peace of mind.

Want to better understand the home warranty cost to seller or buyer? Compare AHS plan options to find what works for your home and your budget.

Why purchase a home warranty?

When it comes to real estate transactions, a home warranty can benefit both the buyer and the seller in different but equally important ways.

For Sellers

Including a home warranty can make your home more attractive to buyers, especially if it’s older or has aging systems and appliances. It also helps minimize the chance of post-sale surprises, like a frustrated buyer reaching out because the A/C stopped working due to a covered issue the week after move-in.

Many sellers are willing to pay the home warranty cost to the seller at closing, as it’s a relatively minor expense that can help avoid disputes about who pays for the home warranty (buyer or seller) and add appeal to the listing.

For Buyers

Moving into a new home comes with enough expenses already. A home warranty can help reduce the financial burden of unexpected covered repairs—from a leaking water heater to a fridge that won’t cool—during your first year of ownership. And if a home warranty wasn’t included at closing, you can still purchase one after the fact.

At the end of the day, whether you’re buying or selling, a home warranty adds value, builds confidence, and provides budget protection when you need it most.**  

See the plan agreement for coverage details, including service fees, limitations and exclusions. Coverage limits and charges for non-covered items may apply.

Eating pizza while unpacking boxes

How to shop for a home warranty

Not all home warranty plans are created equal. When comparing options, here’s what to look for:

What’s covered: Make sure systems and appliances you rely on are included.
Service fee structure: Understand how much you’ll pay when a technician comes out.
Coverage limits: Know the dollar cap per item or service call.
Contractor network quality: Are the contractors qualified?
Add-ons and flexibility: Can you customize your plan to include pool and built-in spa coverage, roof leak repair, or second appliances?

When you choose an American Home Shield home warranty, you can feel confident knowing you’ve made a choice that truly protects your home. With the benefit to video chat repair Experts in real time through the AHS app for select plans***, a nationwide network of thousands of independent and trusted Pros, and transparent service plan details at every level, no other home warranty ensures peace of mind like American Home Shield.

Thinking about coverage?

Sounds like a plan. Find the warranty that fits you best.

Shop Warranties

Frequently Asked Questions

Do I need a home warranty to sell my house?

No. A home warranty isn’t required to sell a house, but it’s a popular seller-paid incentive, especially in competitive markets or when listing older homes.

Is it normal for a seller to pay for a home warranty?

Yes. In many areas, it’s common for sellers to cover the home warranty at closing to make their home more attractive and provide peace of mind to buyers. This arrangement often resolves the common question of who pays for home warranty, the buyer or the seller, with many sellers opting to take on this cost proactively.

Is an AHS home warranty worth it?

Yes, especially when you consider the cost of unexpected repairs. AHS helps cover home warranty repairs for covered parts of HVAC, plumbing, electrical, appliances, and more—up to your plan limits—with access to trusted local Pros and flexible plan options.

Home know-how starts here

Check out the Home Matters blog for even more resources on improving your real-estate savvy.

Learn more

tech with It's a good day to warranty on back of shirt

AHS assumes no responsibility, and specifically disclaims all liability, for your use of any and all information contained herein.

Sources:

*The Electronics Protection Plan is provided by Allstate Protection Plans.

** See the plan agreement for coverage details, including service fees, limitations and exclusions. Coverage limits and charges for non-covered items may apply.

** Video chat available as a member benefit with select AHS plans. Video chat hours are from 8AM - 9PM CST, 7 days/week. Subject to change."