Home Warranties for Sellers

Home warranties are often thought of as something buyers get. But sellers use them too, both to protect themselves while the home is on the market and to make the listing more attractive. Here's how seller coverage typically works and when it might make sense.

Two ways sellers use home warranties

Coverage during the listing period

Some providers offer seller coverage that starts when the home is listed. If the furnace, water heater, or a covered appliance breaks while you're trying to sell, the plan may cover the repair, subject to its terms.

A breakdown in the middle of a sale can cause real headaches. A buyer's inspector may flag it, or it may break between inspection and closing. Listing coverage can help you handle the repair without a large unexpected bill.

A plan for the buyer at closing

Many sellers offer to pay for a one-year home warranty for the buyer. The plan transfers to the buyer at closing. In many seller-coverage arrangements, the cost of the plan is paid at closing out of the sale proceeds.

Offering a warranty can give buyers some peace of mind, especially on an older home. It may also help reduce back-and-forth after closing if something breaks shortly after the buyer moves in.

When it can make sense

Seller coverage is worth considering if:

• Your HVAC system, water heater, or appliances are older
• You expect the home to be on the market for a while
• You live elsewhere and the home is vacant during the sale
• Comparable listings in your area commonly include a warranty
• Your agent thinks it would help the listing stand out

It may matter less if your home's major systems are new and still under manufacturer warranties.

What listing coverage usually includes

Listing-period coverage is often more limited than a full buyer plan. Common differences:

• It may cover systems only, or a shorter list of items
• Some providers exclude certain add-ons until the buyer's plan begins
• Coverage limits may be lower
• It typically ends at closing, or after a set period if the home doesn't sell

Read the seller coverage terms separately from the buyer plan. They're often different documents.

Steps to set it up

1. Talk with your agent. They can tell you whether warranties are common in your market and which providers local agents work with.
2. Compare plans. Look at both listing-period coverage and the buyer plan.
3. Check pre-existing condition rules. Home warranties generally don't cover issues that existed before coverage started. Known problems should be repaired or disclosed.
4. Enroll when you list. Listing coverage generally needs to start before the home goes on the market or shortly after.
5. Confirm payment at closing. Make sure the warranty appears on the closing paperwork if that's how it's being paid.

Disclosure still matters

A home warranty isn't a substitute for disclosing known defects. Seller disclosure rules vary by state, so follow your state's requirements and your agent's guidance. Don't assume a warranty will cover a problem you already know about, since pre-existing conditions are a common exclusion.

Questions to ask a provider

• Is listing coverage included, and when does it start?
• What happens if the home doesn't sell within the listing period?
• Can the buyer choose a different plan tier or add options at closing?
• Is the plan transferable if the buyer's lender or title company handles payment?
• What's the service fee for each visit?

You can learn more about how plans work on our home warranty overview, see coverage rules by state on our home warranty states page, and get answers on our FAQ page.

How Warranty Wizards can help

We help sellers compare home warranty plans from third-party providers and explain what each covers before you buy, including listing-period terms. To get started, request a free quote at /get-a-quote/.