Who pays for the home warranty?

calculating home warranty payment


It’s natural to wonder whether the buyer or seller pays for the home warranty when buying or selling a home. The answer to this question depends on various factors, such as local real estate customs or negotiations. However, whether you’re the buyer or seller, it’s important to choose the right home warranty for your situation.

A home warranty, also known as a home protection plan, is an annual service agreement that provides coverage for repairs and replacements on home systems and major appliances. At the time of service, the homeowner pays a service call fee that may be applied toward the cost of the covered repair or replacement. The home warranty company may offer multiple deductible options, where the customer can choose to pay more or less per month, thereby lowering or increasing the deductible amount. 

Depending on the sale terms, the buyer or seller pays for the warranty. Let’s take a closer look at home protection plans, who pays for them and how to find the right one for you.


Does the buyer or seller pay for the home warranty?

Who pays for the home warranty is often part of real estate negotiations. For example, a buyer requests that the seller pays for the home warranty for one year from the sale date. Buyers rely on home warranties to protect themselves from major appliance or system failures that may occur within the first year of home ownership.

Some sellers offer to pay for the home warranty, as it’s an enticing selling point to encourage buyers to close on a house. If the seller currently has a home protection plan, they could transfer it to the new homeowner. Sometimes, a realtor will give home buyers a home warranty as a thank-you gift for doing business.

No matter who pays for it, though, it’s important to know that not all home warranty plans are the same. Some warranties only cover major appliances or systems, while others cover both to provide complete home protection. Be sure to note any exclusions or limitations to your coverage. Deductibles and service fees also vary between plans. It’s important to carefully review a home warranty policy to understand what type of coverage you’re receiving as the buyer or offering as the seller.

Offering a home warranty when selling your house

Most buyers appreciate motivated sellers who’re willing to offset any or all closing costs, so your real estate agent may suggest that you offer a home warranty when selling your house. It’s an enticing selling point that could lead potential buyers into agreeing with your asking price. A home warranty is a small investment that could lead to a big payoff if you sell your home quickly and at full price.

Having a home warranty helps buyers feel confident in their purchase. It also releases sellers from responsibility if a major appliance or system breaks down soon after selling the house. Your realtor may also suggest that you buy a home warranty during the selling process if you don’t have one. Home warranties can protect sellers from large expenses should anything break before the sale goes through.

Buying a home warranty when purchasing a house

When buying a house, it’s impossible to learn everything about its history of usage, repairs and replacements. If a seller doesn’t offer to pay for a home warranty, it’s a smart move to buy a home protection plan, especially if you’re purchasing an older home.

Major appliances and home systems have varying life spans, even under normal wear and tear. A home warranty covers repairs or replacements for some or all of the following:

  • Air Conditioning
  • Attic Fans
  • Ceiling Fans
  • Central Vacuums
  • Clothes Dryers
  • Clothes Washers
  • Cooktops
  • Dishwashers
  • Doorbells
  • Electrical Systems
  • Food Centers 
  • Freestanding Ice Makers
  • Garage Door Openers
  • Garbage Disposals
  • Heating Systems
  • Instant Hot/Cold Water Dispensers
  • Microwaves
  • Plumbing Systems
  • Range Exhaust Hoods
  • Ranges 
  • Refrigerators
  • Septic Systems
  • Smoke Detectors
  • Sump Pumps
  • Toilets
  • Trash Compactors
  • Wall Ovens
  • Water Heaters
  • Whirlpool/Jetted Tubs 

A home inspection may not always reveal problems that could happen soon after buying a house. For example, a home inspection in the winter may skip over the air conditioning (A/C) system if it’s too cold outside to run it. Then, when you turn the system on the first hot day you need it, a component could completely fail.

Homeowners should choose a home protection plan to offset potential expensive repairs like a new A/C unit. It’s a service contract that gives buyers peace of mind that they’re covered in case of emergencies. It’s reassuring to know that help is on call when you’ll need it most — like on the hottest day of the year in your new home.


Do I need a home warranty at closing?

A buyer or seller can purchase a home warranty at any time. It doesn’t have to be done at closing, although it certainly can be. A seller may wish to purchase a home warranty during the selling process or have an agreement to transfer it to the new owner. Home warranty contracts are often good for a year and renewed annually.

People consider home warranties more often during closing because they’re the seller who wants to shield themselves from liability or the buyer who’s looking for reassurance that they won’t be stuck footing an expensive repair bill.


Is a home warranty part of closing costs?

A home warranty might be part of closing costs if the seller or buyer pays for it. Details about the warranty and its cost are in the purchase contract. A home warranty usually isn’t required to be part of closing costs; however, the practice can vary by state or locale. If you have any further questions, check out our home warranty FAQ or contact Cinch Home Services at (866) 408-0024.


Is a home warranty the same as homeowners insurance?

No, a home warranty is not the same as homeowners insurance. A home warranty protects your major appliances and systems from normal wear and tear, whereas homeowners insurance protects yourself and your home from the effects of accidental events, such as:

  • Fires
  • Hail
  • Lightening
  • Natural Disasters
  • Smoke
  • Storms
  • Theft
  • Wind

Covered items depend on the type of homeowner’s insurance policy you purchase. Common coverage includes protection for dwellings, personal property and other structures on your property. This insurance can also cover liability for injuries or damage to someone else’s property, such as your neighbor. All policies include a deductible that you must pay upfront when you make a claim.

Homeowners insurance averages $1,477 a year, and the cost can vary significantly depending on where you live. To lower your annual cost, you can choose a higher deductible amount, but be sure that you can still afford to pay it when an emergency happens. It’s usually mandatory for home buyers to acquire homeowners insurance when purchasing a home.


How much does a home warranty cost?

Home sellers and buyers want to know how much a home warranty costs. Home warranty coverage pricing varies greatly depending on the type of coverage you need and where you live. 

Cinch makes protecting your home affordable with three home protection plans to choose from, starting at $27.99 per month. With flexible payment options, you can pay in full upfront or pay a modest monthly fee to cover major appliances or built-in systems.


Let Cinch help you find the right home warranty

Cinch is a leading home warranty company that helps homeowners find the right home protection plan for their budget and coverage needs. With flexible payment options, you can pay in full upfront or pay a modest monthly fee to cover major appliances or built-in systems. Cinch also offers a combination plan, known as our Complete Home protection plan. It gives you the most comprehensive warranty coverage for your home.

Get a free personalized quote today from Cinch in as little as 10 seconds. We’re here to help you choose the best annual plan for you. With 24/7 customer service, you can request service anytime you need it. We’ll send out experts from our network of vetted service professionals to get you back up and running quickly.


A home warranty is a service agreement that provides coverage for home appliances and systems. Learn who pays for the home warranty.