Should You Offer a Home Warranty as a Seller Incentive?
In today’s real estate market, where buyers are cautious and home prices remain elevated, sellers need every edge they can get. One increasingly popular tactic is offering a home warranty as part of the deal. But is it worth the cost? Does it really influence buyers and can it help your home sell faster?
If you’re considering offering a home warranty to make your property more attractive, here’s a breakdown of the benefits, drawbacks, and when it might make the most sense.
What Is a Seller-Offered Home Warranty?
A home warranty is a service contract that covers the repair or replacement of major systems and appliances in the home, such as the HVAC, plumbing, water heater, and kitchen appliances.
When a seller offers a home warranty, they usually pay for the buyer’s first year of coverage typically costing $350 to $700 depending on the provider and plan. The buyer then decides whether to renew after the first year.
Benefits of Offering a Home Warranty to Buyers
1. Builds Buyer Confidence
Buyers especially first-time or younger buyers are often nervous about the unknowns in an older home. A home warranty offers peace of mind that they won’t be stuck with a big repair bill right after moving in.
A 2024 Porch.com survey found that 58% of first-time buyers said a home warranty positively influenced their decision to buy.
2. Speeds Up the Sale
Real estate agents frequently cite home warranties as a tool for reducing time on market. Buyers may move forward faster, knowing there’s protection in place if something breaks.
3. Reduces Price Negotiation Tension
If a home has aging appliances or older systems, buyers may try to negotiate the price down. Including a home warranty can soften concerns and preserve your asking price.
4. Covers You During the Listing Period
Many warranty companies offer listing coverage for sellers at no upfront cost. That means you’re protected if something breaks while the home is on the market (you just pay the service fee).
Possible Downsides and Limitations
1. It’s Not a Cure-All
Some buyers don’t value home warranties much especially experienced or investor buyers who prefer to self-insure. A warranty won’t fix structural defects or roof issues, and it won’t replace a full inspection.
2. Coverage Has Limits
Home warranties typically don’t cover pre-existing conditions, improper maintenance, or cosmetic issues. If buyers expect too much from the warranty, they may end up disappointed which can reflect poorly on the seller if they feel misled.
3. Cost Comes Out of Your Proceeds
Although warranties are relatively inexpensive, that $400–$700 comes directly out of your net proceeds. For sellers working with tight margins, every expense matters.
When Offering a Warranty Makes the Most Sense
- You’re selling an older home with 10+ year-old systems or appliances
- You’re in a buyer’s market, and need a small edge to stand out
- The home has recently had issues or repairs that might make buyers cautious
- You want to minimize back-and-forth negotiation on minor repair requests
In these cases, offering a home warranty can be a cost-effective way to make your listing more attractive without a big price drop.
What Buyers Think in 2025
According to Zillow’s 2024 Buyer Sentiment Index:
- 64% of buyers viewed seller-offered warranties as a sign of goodwill
- Only 28% expected one, but most considered it a bonus
- Buyers aged 25–39 were the most likely to consider it a deciding factor
So while a warranty may not be the top selling point, it’s definitely a “value booster” that helps increase buyer trust.
How to Include a Home Warranty in Your Sale
- Choose a reputable provider: Look for companies with strong reviews and transparent coverage.
- Specify the plan and limits in your listing: Make it clear what the warranty covers (and doesn’t).
- Coordinate with your agent: Many real estate agents have partnerships with home warranty companies and can help with selection and paperwork.
- Provide documentation at closing: Include the warranty confirmation and contact info for the buyer.
Final Thought: A Small Investment with a Big Perception Boost
While a home warranty won’t guarantee a sale, it can absolutely nudge a buyer off the fence especially if they’re worried about older systems or stretching their budget. If your home isn’t brand new or you want to give your listing a competitive edge, offering a warranty could be a smart, low-cost incentive that builds trust and shortens time on market.
Next up: Is Home Insurance Required When Buying a House?
Learn when lenders require home insurance, what it needs to cover, and how to avoid closing delays.
