How a Home Warranty Can Increase a Property's Sale Price and Speed

All kinds of issues can draw out the process of selling your home. After finding a real estate agent, making necessary repairs, sprucing things up for the listing, and going through all the required inspections, you may still encounter slowdowns when potential buyers want to negotiate.

Maybe this is your first time hearing about home warranties designed for buyers and sellers. Perhaps your agent has mentioned them, and you want to learn more. Or maybe you’ve experienced a link between a home warranty and seller satisfaction when previously selling a home. Either way, knowing the home warranty benefits for sellers can make the process easier. Let’s review how real estate home warranties work and their benefits for buyers and sellers.

What is a Home Warranty?

Home warranties protect your budget when covered home appliances and systems break down due to normal wear and tear. For the price of your plan plus a service fee for each request, your home warranty company takes care of repairs or replacements of covered items. A home warranty contract normally lasts for one year and is typically renewable.

How a Real Estate Home Warranty Works

There are a few differences between a home warranty for existing homeowners and a real estate home warranty. A real estate home warranty is purchased during a real estate transaction. Often, the seller pays the cost of the warranty so that they get the benefit of seller’s warranty coverage during the listing period. The warranty coverage then transfers to the buyer when the home is sold.

For the home seller, the warranty coverage lasts up to 180 days or until the sale closes — whichever comes first. For the homebuyer, the coverage begins when the sale closes and usually lasts for one year.

Note: If you’re selling your home without an agent, you can call our Real Estate New Orders department at 800.444.9030 and select option 3 to purchase coverage.

With this home warranty, seller protection is a priority. It can help ensure you aren’t stuck with huge repair bills for covered home systems and appliances, whether they suddenly break before or after the sale.

Learn More: Discover the unique ins and outs of real estate home warranties with our Guide to Home Warranties for Buyers and Sellers.

Home Warranty Benefits for Sellers

One of the main home warranty benefits when selling a house is peace of mind. There’s so much to do and keep track of when selling your home; worrying about a broken dishwasher or water heater shouldn’t be one of them. Our service request process often takes less time than coordinating repair professionals so that when your life gets extra busy, you have the benefits of a home warranty and peace of mind.

A home warranty during the real estate process can also help increase the property's sale price. Just as coverage can give home sellers peace of mind, it can also put buyers at ease, knowing they won’t have to cover all the costs to repair or replace covered items after they move in. This added budget protection is something buyers may pay more for. The costs of real estate home warranties often fall to the sellers, but the coverage can be used to negotiate with buyers on the sale price.

Selling homes faster with a warranty is another benefit. Homebuyers looking at listings with similar square footage, floor plans, and amenities in the same location may not be as highly motivated if a home warranty isn’t included. Serious homebuyers see the coverage provided by a real estate home warranty as a gesture that sets some listings apart from the rest. And with homes on the market longer than 90 days being considered “stale” or suspect, incentives like a home warranty can help speed up your timeline.

Home Warranty Benefits for Buyers

Home warranty benefits when selling a house often apply to buyers after the sale, too! And what’s valuable to buyers usually means good news for sellers.

Homebuyers dislike coordinating repairs or replacements right after buying a home as much as sellers dislike calling a repair company during the listing process. Real estate home warranties give buyers peace of mind when covered systems and appliances break unexpectedly after the sale closes. 

Since buying a home is a huge financial transaction, real estate home warranties help ensure that buyers don’t have to spend lots more money. This is especially attractive considering that the seller often pays the cost of the real estate warranty.

How to Get a Real Estate Home Warranty Plan

Homebuyers: When looking at home listings, look for those that offer real estate home warranties as a part of the sale. Warranty plans for buyers can last one or two years after the close of the sale and can be incredibly valuable in a new home. 

Home sellers: Talk to your real estate agent about including a real estate home warranty during the listing process. They’ll be responsible for ordering the plan, so it's smart to discuss the extent of the coverage and how it works before making a final decision.

Not working with an agent? That’s okay. Just call our Real Estate New Orders department at 800.444.9030 and select option 3 to talk about the details.