Would you believe that a home warranty could make the difference between a buyer choosing your house or another? When competition is fierce, or buyers are slow to decide, a home warranty could provide the assurance needed to set your house for sale apart from the rest. Here’s your guide to offering a home warranty when selling.

Home Warranty as Part of a Marketing Package

The practical purpose of a home warranty is to persuade a buyer to say yes to your house. There’s no suggestion, when purchasing a home warranty, that your house is in disarray or that a buyer needs that kind of protection. Instead, you can use a home warranty in conjunction with other marketing tactics to give your property an edge over the other houses for sale in your area.

Other items you might invest in to include in your marketing package along with a home warranty could be a listing appraisal to show a professional opinion of your home’s fair market value, and an inspection to demonstrate to buyers that you, too, care about the condition of the house you’re selling. The reality is, a buyer may never use the home warranty you supply, nor may they validate an appraisal or honor an inspection. However, the presence of these items during home tours, especially when combined, tells a story that gives the buyer confidence in your property. You can also include a C.L.U.E. report with your marketing package, which is an account of all insurance claims filed against your property – or, on the contrary, proof that no claims have been filed.

When you offer a home warranty with the sale of your home, you’re connecting with the buyer and sending them the message that you won’t sell them a lemon and leave them with expensive repair projects. Consumers of most items have the assurance of knowing they can return an item with a receipt for a refund or exchange. Consumers in real estate don’t have that same luxury. The investment can feel like an unsettling risk.

When your house for sale is in a neighborhood with several other homes for sale that are similar to yours in size, style, and price, your home warranty inclusion may be the deciding factor in your favor. Or, if you’re working with a first-time-buyer who is hesitant to commit, that warranty could push them over the edge into the realm of home ownership.

The Cost of Offering a Warranty with Your Home for Sale

Basic home warranties run, on average, between $300 and $500. For that investment, the warranty covers the property for up to one year after transfer of ownership.

Talk with your real estate agent about your marketing strategy and the up-front investment of preparing your house to list. On the plus side, you can then also talk to your real estate agent about how to price those costs into the sale of the home, so you can recoup your investment. Furthermore, your agent may have existing relationships with home warranty providers.

Note that some home warranty companies understand their clients’ needs and have developed a home warranty that is only activated at closing, which is when the premium is due. In this situation, you can offer the home warranty with the purchase and provide the proper information, but not pay for that warranty until you receive the proceeds from the sale of your property. The advantages to this method are that there’s no out-of-pocket expense to you, and if the transaction falls through for any reason, that warranty never gets activated and the clock never starts ticking towards expiration.

Preparing to Shop for Home Warranties

Each home warranty company is different and has varying requirements, inclusions, and exclusions. In most cases, only updated appliances are covered, and all systems and appliances must be regularly maintained and/or serviced. When you’re preparing to list your home, start by gathering all of your paperwork, manuals, receipts, warranties, and documents pertaining to each appliance. Having an inventory of your appliances and a description along with their year, make and model is also handy as an inventory to be recorded in your contract with the sale of your home.

Note that any appliance currently covered by a manufacturer’s warranty does not apply to a home warranty because it defaults to the manufacturer warranty. Not only will this paperwork help in preparing to seek your home warranty, but will also be a boon to buyers who appreciate the convenience of having this information organized, ready, and at their fingertips for inspection.

How a Home Warranty Works

The company from whom you purchase your home warranty will provide you (the homeowner, to be passed to the buyer) a list of approved contractors. When the homeowner experiences a problem with one of the home’s major systems or appliances, they refer to the catalogue of providers. The homeowner pays a deductible of between $50-$75, in general, for the service call, but pays nothing additional for parts or labor if repairs or replacement is deemed necessary.

When the repairs are complete, homeowners are asked to participate in surveys, ratings, and reviews to determine whether that provider should continue being included in the list of approved contractors.

The convenience to the homeowner is not only in having that warranty in the first place and having only a low deductible for service, but also the ability to draw on a pool of approved trusted providers.

It’s Not Just for the Buyer

Although it’s true that you’re primarily focused on marketing tactics when considering including a home warranty with the sale of your home, the benefits of a home warranty aren’t exclusive to the buyer. In fact, there’s peace of mind in a home warranty for the seller, too.

Even if you have an inspection and supply a seller’s disclosure statement, you may still be liable for malfunctions on the property within a certain amount of time. The last thing you want to deal with six months from now is a busted air conditioning unit in the house you no longer own.

Not Homeowners Insurance

A home warranty is not required, but you can include one as an option if you choose. Homeowners insurance, however, is altogether different and is required of the buyer. You opting to include a home warranty with the sale of your home does not in any way influence the buyer’s obligation to purchase a separate homeowners’ insurance policy.

Researching Home Warranty Companies

Although you may be of the mindset that the home warranty you’re offering with the sale of your home is a courtesy included as a marketing tool, that doesn’t mean you should toss your money at a company who has racked up complaints or negative reviews. And, since you now know you might also benefit from a home warranty as the seller, it’s best to choose a home warranty company with strong standing and solid reviews.

When complaints are filed against home warranty companies, the primary issue is lack of coverage. Typically, the homeowner failed to understand that stipulations of coverage, the terms of service, or what might nullify the warranty, such as adding on to the home. So, when you begin comparing one company to another, start by assessing what is or is not covered by that particular warranty.

Whereas basic home warranties cost, on average, between $300 and $500, it is possible to purchase upgrades, extra coverage, longer coverage periods, etc. Compare the cost of the basic plan and what that plan includes against the upgrades.

In addition to researching the cost of basic coverage and upgrades, as well as what systems and appliances are or are not covered, investigate each company’s deductible as some may be larger than others.

You can also check with local state resources to verify that the warranty company you’re considering is legally licensed, insured, and able to operate in your state.

Eye-Spy | Checking Out the Competition

Whenever you’re listing a home for sale, it’s an excellent idea to scope out the competition. What other houses in your neighborhood are for sale? How similar are those other houses to yours in size, style, and features? How does the condition of those homes compare to your house? And, while you’re there checking things out, you can assess how many of those homes are including a home warranty with their sale. If other houses in your area are including home warranties, then you’d be selling yourself (and buyers) short by not including one with yours. Your lack of warranty could provoke a buyer to choose a neighboring property over yours. However, if those homeowners aren’t including a home warranty with purchase, then your house could shine above the rest by offering that extra bit of protection as a courtesy to buyers.

Backing Up Your Claims | Seeing is Believing

You may tell a person your house has been well maintained, and you can show them a warranty certificate as added assurance, but the way that person feels when they examine your house is going to dictate how they consider that property as an investment for their future. You can directly influence a buyer’s perception of your property through the art and science of staging.

Staging is the act of preparing your home for showings by decluttering, depersonalizing, neutralizing, repairing and replacing, cleaning, and implementing intelligent design. Through staging, you allow your home to woo the buyer, to invoke daydreams of making memories. When a buyer tours a home that is clean, bright, airy, and drizzled in charm, that home holds considerable value to that buyer. On the other hand, when a buyer tours a home that is dirty, in disarray, disrepair, or that seems riddled with fixer-upper projects, the house loses value quickly. By staging your home and making sure your house is show-ready, you’re doing your part to increase the perceived value, which is then supported by the offering of the home warranty.


In marketing, the idea is not to sell an item, but an experience. You don’t sell the car, but the journey. You don’t sell the mattress, but the restful sleep. You don’t sell the cleanser, but the feeling of fresh. Those same marketing concepts can and should be applied to the sale of your home. Although you can and should choose to work with a highly qualified, professional real estate agent, you’ll be working with that agent to get the job done. Your agent’s role is to help you set the best price for your house, put together an excellent marketing strategy which may include offering a home warranty with the sale of your house, and to help get your house in front of the eyes of the most qualified buyers. Furthermore, your agent protects your interests in reviewing and negotiating offers and contracts. But you, too, have a role in selling your house. Your job includes staging your house to show in its best light, and assembling a marketing package that includes things such as a listing appraisal, home inspection, and a home warranty.

Including a home warranty is not a statement to the buyer that something can and probably will go wrong with your house if they buy it. On the contrary, when you offer a home warranty with the sale of your property, you’re demonstrating confidence to buyers that you have maintained your house well and that you stand by your commitment. A buyer may never take advantage of the home warranty you provide, may never cash in on the need to repair or replace an appliance or major system in your house – but simply knowing that the home warranty is in place could be enough to prompt a buyer to say yes to your house and no to the other houses for sale in your neighborhood.

Talk with your real estate agent about the benefits of including a home warranty with the sale of your house, as well as other marketing strategies. Ask your agent if he or she can recommend any home warranty companies, and proudly display your home warranty to buyers with confidence.

This information is provided courtesy of The Eastside Real Estate Team. Keep us in mind for all your real estate needs. Call us today at 425-200-4093.

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