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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.
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.
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:
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.
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.
When it comes to real estate transactions, a home warranty can benefit both the buyer and the seller in different but equally important ways.
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.
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.
Not all home warranty plans are created equal. When comparing options, here’s what to look for:
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.
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.
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.
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.
Check out the Home Matters blog for even more resources on improving your real-estate savvy.
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."
