Home warranty
A service contract, not insurance, covering repair or replacement of home systems and appliances. Often offered by sellers as a buyer incentive. Coverage varies a lot; read the exclusions.
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See how it worksWhere this comes up in a sale, and what follows
- Prep and photograph the home (comes before)
Part 1 of 4
Why a seller cares
A one-year home warranty is a common sweetener sellers offer, a few hundred dollars for a service contract on the systems and appliances. It reassures nervous buyers and covers less than its brochure suggests.
Part 2 of 4
A simple example
You include a $550 one-year home warranty in the listing. After closing, the buyer's water heater fails and the warranty pays for a replacement minus a $100 service fee.
| What happens after closing | What the warranty tends to do |
|---|---|
| The water heater fails | Covered, minus a service fee, up to a cap |
| The roof leaks | Usually not covered |
| A pre-existing problem the inspection noted | Often excluded |
A home warranty is a service contract with exclusions. As a seller's gesture it is cheap and it helps.
Part 3 of 4
What people get wrong
That a home warranty is insurance. It is a repair contract with caps and exclusions, and it is regulated differently.
Part 4 of 4 · where to read next
Where it appears in the sale
What a definition is, and what it isn't
Keighbor is a software company, not a law firm, brokerage, or tax adviser. This is general information, not legal, tax, financial, or real estate advice about your sale. Your situation may differ. Before acting on a contract, disclosure, title, tax, or pricing question, ask an appropriately licensed professional in your state.
Written and researched by Keighbor Research · drawn from the reference glossary · how we research and check what we publish
In your Room, this word explains itself where it appears.
Your Room defines home warranty in the step you meet it in, beside the document or the date it belongs to. Free to set up, with an agent or on your own.
Organize my saleFree to set up. Pay once when you list: $89 or $189. 7-day refund.