Cost of a Home Warranty When Selling a House

Educational only. This explains how these situations generally work. It is not legal, tax or financial advice, and the rules differ by state — talk to an attorney or CPA about your own situation before you act on any of it.

Cost of a home warranty when selling a house: the short answer

A seller-paid home warranty typically costs $350–$900 for a one-year plan, sometimes more for comprehensive coverage, and is usually offered as a closing-table concession to reassure a buyer about an older home's systems. It's never legally required. Whether it's worth it depends on what you'd otherwise spend to get the same reassurance — a price reduction, a repair credit, or simply selling as-is.

This is general educational information, not financial advice. Home warranty plans, prices, and exclusions vary by provider and by state — read the actual contract before buying one.

What a seller-paid home warranty actually is

A home warranty is a one-year service contract that covers repair or replacement of specific home systems (HVAC, plumbing, electrical) and appliances when they break from normal wear, not from poor installation or neglect. It's not homeowners insurance, and it's not a builder's new-construction warranty. When a seller buys one at closing, it's a concession meant to reassure a buyer — especially on an older home — that if the water heater or furnace fails in the first year, it's covered.

According to Redfin, a home warranty “isn't legally required” the way homeowners insurance usually is as a lender condition — no lender mandates it, and no state or local law requires a seller to provide one. It's purely optional and negotiated.

What it costs

Pricing varies by provider, plan tier, and ZIP code — most providers quote based on your address rather than publishing a flat rate. Based on published cost comparisons: NerdWallet puts the average home warranty premium around $73/month (roughly $876/year), with a typical range of $28–$191/month, plus a separate service-call fee averaging $108.45 each time a technician is dispatched. HomeLight cites a narrower typical range of $350–$900/year for standard plans, rising to $1,200–$1,400/year for comprehensive coverage that adds extras like roof leak or pool equipment coverage.

Put together, a reasonable planning range for a seller-paid, one-year plan is roughly $350–$900, with comprehensive plans running higher — plus whatever service-call fees get used during the year, which the buyer typically pays, not the seller.

Who pays, and how it shows up at closing

When a seller buys the warranty as part of the deal, HomeLight notes the cost “comes out of the proceeds, not out of your pocket” at closing — functionally, it's treated like any other seller-paid closing cost or concession, reducing your net rather than requiring a separate payment up front.

What it doesn't cover — and why that matters

A home warranty's exclusions are where buyer complaints concentrate. Standard exclusions commonly include pre-existing conditions, damage from improper installation or “construction-related errors,” problems from lack of maintenance, structural issues, and anything caused by a natural disaster — SelectHomeWarranty's own published exclusions list is representative of the industry standard here. In practice, that means a warranty doesn't cover every failure, only ones the provider agrees weren't pre-existing or maintenance-related, which is exactly the kind of determination that generates disputes.

Two real examples worth knowing before buying one: Choice Home Warranty's own Better Business Bureau profile shows 9,619 complaints filed in the last three years, with a B rating. And in January 2026, the Arizona Attorney General announced an $11.8 million settlement with Choice Home Warranty over allegations the company misrepresented coverage and failed to replace appliances and AC units it had advertised as covered, following more than 1,500 Arizona complaints filed since 2013 (Arizona Attorney General's Office). Neither fact means every claim gets denied — but they're a real reason to read a plan's exclusions closely rather than assume “covered” means “no questions asked.”

Is it worth it? The honest comparison

There's no NAR or other data confirming that offering a home warranty measurably speeds up a sale or raises the sale price — that causal claim shows up often in industry marketing, but it isn't backed by verifiable survey data. What NAR's own reporting does show is that seller incentives generally — a category that includes closing-cost credits and home warranties together, not warranties alone — were offered by only 24% of sellers in the most recent survey, down from 33% the year before (National Association of REALTORS). It's a common-but-declining tool, not a universal one.

The more useful comparison is to what the warranty is standing in for: a buyer's worry about an old HVAC system or water heater failing. A straight price reduction or repair credit addresses the same worry without the exclusions and claims process.

Neither option changes your net proceeds by more than the cost of the warranty either way — the real difference is dispute risk. A credit or price reduction is money the buyer controls outright; a warranty is a promise from a third party with exclusions, and the complaint and enforcement data above shows that promise doesn't always hold up cleanly.

Does a cash sale change any of this?

Yes, in a specific way: a cash, as-is sale typically skips the warranty question entirely, because the buyer isn't asking the seller to backstop the home's systems — they're buying the house knowing its condition and pricing accordingly. That's part of the honest tradeoff of a cash sale: you're not getting retail price, but you're also not spending $350–$900 on a warranty, negotiating over exclusions, or betting that a claim gets approved if something fails in year one.

Alternatives to consider

• Offer a price reduction or repair credit instead — it gives the buyer money they control directly, without a third party deciding what's covered.
• Get a pre-listing inspection so you know what's actually likely to fail, rather than buying blanket coverage for unknown risk.
• Read the specific exclusions list before buying any plan — “covered” and “actually paid out” aren't the same thing.
• Confirm the provider is properly licensed — Texas and California both regulate home warranty providers as licensed service contract companies.
• If you'd rather not deal with any of this, a cash, as-is sale removes the warranty decision from the table entirely.

What this means for your decision

A seller-paid home warranty is a modest, optional cost — usually $350–$900 — that some sellers use to reassure buyers about an older home. It isn't required by any lender or law, and there's no solid data showing it actually speeds up a sale or raises the price. A straight credit or price reduction gives a buyer the same reassurance with less dispute risk, and a cash sale skips the question altogether. Send us the address and we'll give you a straight read on whether any of this is worth spending money on for your specific house.

Common questions

Do I have to offer a home warranty when I sell my house?

No. It's never legally required by any state, local law, or lender — it's a purely optional, negotiated concession.

How much does a seller-paid home warranty typically cost?

Roughly $350–$900 for a standard one-year plan, based on published cost comparisons, with comprehensive plans running $1,200–$1,400 or more depending on provider and coverage.

Does offering a home warranty help my house sell faster or for more money?

There's no verified data confirming that. NAR's broader data shows seller incentives in general — including warranties — were offered by only 24% of sellers in the most recent survey, down from 33% the prior year.

What does a home warranty not cover?

Common exclusions include pre-existing conditions, damage from improper installation, problems caused by lack of maintenance, structural issues, and natural disaster damage. Always read the specific provider's exclusions list.

Is a price reduction better than buying a home warranty?

It can be, because a price reduction or repair credit gives the buyer money they control directly, with no third party deciding what's “covered” later. A warranty has a similar cost but adds a claims and exclusions process.

Does selling for cash avoid the home warranty question?

Yes. A cash, as-is sale is priced around the home's condition rather than backstopped by a warranty, so the question of whether to buy one typically doesn't come up.