What Is a Home Buyer’s Warranty?

If you're worried about paying for repairs after you buy a house, a home buyer’s warranty could save you money.
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Written by Whitney Vandiver
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Edited by Tina Orem
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A home buyer’s warranty is a service agreement that covers some repairs on certain appliances and systems when someone buys a house. New homeowners can get them for existing houses and new construction. Who pays for the home warranty depends on the real estate contract.

What is a home buyer’s warranty?

When buying a house, most people rely on home inspections to tell them the condition of the house’s appliances or systems, such as the air conditioner

National Association of Realtors. Home Inspections. Accessed Apr 23, 2024.
. A thorough home inspection can point out issues such as plumbing problems or an inoperable oven — concerns that potential buyers might otherwise miss. But a home inspection doesn’t fix the problems it uncovers; that falls on whoever buys the house if repairs aren’t negotiated into the contract.

Have a home inspection coming up? It’s good to know the do’s and don’ts of a home inspection, including if you should be there with the inspector and how to use the inspection to negotiate a better price.

Some companies offer plans that are only for home buyers or sellers and include coverage that is more likely to be relevant for new homeowners or sellers who are worried about items breaking down while their houses are on the market.

Another option for homebuyers who are purchasing a home with older appliances or systems is to get a home warranty. This can help the new homeowners pay for repairs to certain items if they break down or malfunction after they purchase a house.

American Home Shield Home Warranty
GET STARTEDon American Home Shield's website
Monthly fees
$20 and up
Service fees
$100 or $125
per claim
States available
states, and Washington, D.C.
Liberty Home Guard
Call Liberty Home Guard
GET STARTEDon Liberty Home Guard's website
Monthly fees
$50 and up
Service fees
per claim
States available
states, and Washington, D.C.
Select Home Warranty
GET STARTEDon Select Home Warranty's website
Monthly fees
$44 and up
Service fees
per claim
States available
states, including Washington, D.C.

What does a home buyer’s warranty cover?

A home buyer’s warranty usually covers repairs or replacements for built-in appliances, major home systems or both. For example, some home warranty companies have plans only for kitchen appliances, sometimes including washer and dryer sets, as well as plans that only cover systems. But many companies have comprehensive plans that offer combined coverage of some or many systems and appliances.

The coverage depends on the plan you or a seller choose to purchase. The better the coverage, the more expensive the plan.

Should you get a home buyer’s warranty on a new construction? Most home warranties don’t cover repairs to appliances and systems that are under manufacturer warranties. If you’re buying a new house with items that will be covered by existing warranties, a home buyer’s warranty is unlikely to save you any money during the first year.

How much does a home buyer’s warranty cost?

The average cost of a home warranty is about $20 to around $120 per month. The price generally depends on the company, the plan, any supplementary coverage and your location.

Who pays for a home buyer’s warranty?

  • Some sellers offer to pay for a home buyer’s warranty to give potential buyers peace of mind about the house’s appliances and systems. Purchasing a house with a home warranty means the new homeowners will have coverage if an included item breaks down during the first year of owning the house. 

  • Real estate agents can also pay for a home warranty for their clients if a seller won’t pay for one.

  • Home buyers can purchase their own home warranties if a seller refuses to include one in the real estate contract.

4 tips for getting a home buyer’s warranty

  1. Ask for a home warranty plan. You can ask the seller to pay for a home warranty plan if they don’t offer to buy one. They might refuse to do it, but it can be a negotiating point if the systems and appliances in the house are older.

  2. Pay attention to the plan’s coverage. Most home warranty providers have multiple plans that include coverage for different systems and appliances. If someone else is purchasing a home warranty for you, look at the plan’s coverage to ensure it includes everything you want covered. 

  3. Shop around. If a home seller agrees to pay for a home buyer’s warranty, they might agree to pay a certain amount instead of picking a certain plan. If that’s the case, compare plans to see what coverage you can get for what the sellers are paying.

  4. Verify if a plan can be transferred. If a seller says they’ll transfer their existing home warranty to the buyer, ask to see the plan’s coverage and the service agreement. Although many companies allow customers to transfer their home warranties, you don’t want to find out after purchasing the house that the warranty doesn’t transfer.

» LOOKING FOR HOME WARRANTIES? Check out NerdWallet’s best home warranties in California and best home warranties in Texas

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Frequently asked questions

Some buyers ask sellers to pay for a home warranty. The warranty helps pay for any repairs to appliances or systems after purchasing a house. Sellers aren’t required to pay for home warranties.

A home buyer’s warranty can help sell or negotiate the sale of your home, especially if your appliances and systems aren’t new and aren’t covered by manufacturer warranties.

No, home buyer’s warranties only cover certain items. They exclude many specific mechanical parts and many situations. Always read the service agreement before consenting to a home warranty so you understand what will be covered.

NerdWallet's Best Home Warranties
Our top picks for 2024 offer good coverage options at a reasonable cost.
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