More sellers are now including home warranties with the sale of their homes to comfort buyer concerns. Ideally a home warranty provides some assurance to the buyer regarding systems, appliances or other failures within the first year of ownership by arranging for repair or replacement with only a minimal service call fee. Keep in mind that homeowners, themselves, can also purchase a home warranty at any time. Prior to purchasing a home warranty, homeowners should understand what they are and when they are most needed.

What is a Home Warranty?

A home warranty generally covers the major components of a home, such as heating and cooling systems, appliances and water heaters. Typically, minor repairs such as plumbing leaks are not included in coverage. It can be purchased for any age home, though the cost may increase with older properties with additional expense for larger homes or slightly lower costs for condominiums.

With some warranties, owners pay only a set amount regardless of the cost of the repair or replacement. With other programs, payment of a portion or percentage of the cost may be required. So it’s important to read the fine print before selecting a warranty. Know what is included and what can be added for an extra price.

The Benefits

For the buyer, a home warranty provides peace of mind by eliminating the possibility for hundreds of dollars in repairs or exhausting emergency funds for major issues during the first year of ownership. Even one repair can exceed the entire annual cost for the home warranty.

For the seller, a home warranty may attract additional buyers, especially if the home being sold is older with older systems and appliances. Because many first-time buyers may have limited funds to invest into the property, and a warranty can be an attractive asset.

The Downside

Paying for a warranty for years and never needing to use it for repairs may make the proposition appear as a useless cash drain with no rewards. This case is often seen with newer homes when a special home warranty may be unnecessary if the home is still covered under the builder’s warranty. For example, most appliances come with a two- or five-year manufacturer’s warranties, so you wouldn’t need a separate home warranty during that time.

In the end, the decision to buy or not to buy boils down to you and how prepared you are to pay for unexpected expenses. It also clearly depends on the age of the home you’re buying or selling. For additional information regarding home warranty options, feel free to contact me today for a consultation. I will be happy to help you determine the value of your home, or find your next dream home.


Allyson Hoffman, ABR, ACRE, CDPE, CRS, e-PRO, GRI, SFR, SRES
RE/MAX Villager
Serving Chicago's North Shore, North and Northwest Suburbs
[email protected]

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Allyson Hoffman is your ultimate real estate resource for Chicago's North Shore, North and Northwest Suburbs and surrounding areas. Visit my website for detailed information regarding today’s real estate markets. 

Image courtesy Valerie Everett/