Home Warranty in Real Estate Transactions: Buyer & Seller Guide 2026

Quick Answer

In real estate transactions, sellers often purchase a home warranty to protect themselves during the listing period and transfer it to the buyer at closing. Buyers can also negotiate a warranty as part of the offer. 90% of realtors recommend including a home warranty because it reduces post-sale disputes and gives buyers confidence.

Key Takeaways

• Seller warranties protect the home during listing — if something breaks while on the market, you’re covered
• Buyers can request a warranty in their offer — it’s a common negotiation point
• Transfer costs $25–$75 — usually paid by the seller as a closing cost
• Warranties reduce post-sale disputes — buyers call the warranty company, not you
• First-year coverage is most valuable — new homeowners are unfamiliar with the home’s systems
• Average cost: $400–$600 for a combo plan — a small price for peace of mind

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Seller-Purchased Warranties

Sellers purchase a warranty that:

1. Covers the home during the listing period
2. Transfers to the buyer at closing
3. Can be marketed as a selling point in the listing

Buyer Negotiation Tips

• Request a home warranty in your initial offer
• Ask for a combo plan (systems + appliances)
• Ensure the warranty covers the home’s specific systems (pool, well, septic if applicable)
• Budget for renewal in year two

FAQ

Who pays for the home warranty at closing? It’s negotiable. Often the seller pays as a concession, but buyers can also pay.

How long does the buyer’s coverage last? Typically 12 months from closing. The buyer can renew annually.

Can the buyer choose the warranty company? Usually the seller selects the provider, but buyers can request a specific company.