What Does a Home Warranty Cost a Seller?

What is a sellers home warranty?

Both a sellers and a buyers warranty cover the same basic home systems, such as heating and cooling, plumbing and electrical systems, as well as the most common appliances, like washers and dryers, ranges, refrigerators, built-in microwaves, garbage disposals and dishwashers. The main difference is who pays for the home warranty and how long the coverage lasts.

A limited sellers home warranty, for instance, only covers the time period from when the house is listed to when the transaction closes. However, many sellers choose to purchase a full warranty that can be transferred to the buyer as an added incentive. In some cases, a home warranty company may offer free initial coverage during the listing period if the seller agrees to buy an additional year’s protection for the new owner.

» LEARN: What is a home warranty?

What are the benefits of a home warranty for sellers?

Sellers can benefit in a few big ways from purchasing a home warranty, especially in a competitive housing market. Advantages include:

• Covering unanticipated repair or replacement costs during the listing period
• Making you more competitive in a buyer’s market
• Expediting closing timelines after an inspection
• Protecting appliances no longer covered by the manufacturer’s warranty
• Transferring the warranty to the buyer after closing

Adrian Pedraza, a real estate investor with The California Homebuyer who's worked with numerous buyers and sellers, has this advice for his clients: “When selling a home, it's not just about curb appeal — it's about giving peace of mind. A home warranty is that reassuring handshake, promising buyers that major appliances and systems won't spring unexpected costs on them shortly after moving in.”

However, buying a home warranty when selling your home won’t always be necessary, so consult with your real estate agent first. For instance, if most of your appliances are new and still covered under the original manufacturer’s warranty or if you’re listing your home in a seller’s market, a warranty may be an unnecessary expense.

On the other hand, a home warranty may be just what you need to set yourself apart from other sellers. “In competitive markets, like California, homes with warranties stand out, signaling trust and long-term value to potential buyers,” Pedraza said.

» COMPARE: Best home warranty companies

What does a sellers home warranty cost?

There are two main costs to consider when pricing out a home warranty: the actual plan cost and the cost of service calls. On average, an annual policy costs $40 to $60 a month, while service calls cost between $75 and $150. This fee (sometimes called a deductible) must be paid each time the warranty company sends a contractor to your home to assess a problem.

You can potentially get a free limited sellers warranty if you agree to purchase a one-year buyers warranty after the house sale.

For a seller, there may be even more discounts available from a warranty company. For instance, many companies offer free or discounted limited coverage while your home is listed (typically capped at six months) if you agree to purchase a full-year warranty for the buyer. It’s also worth noting that from a seller’s perspective, once the policy is transferred, it will be the new homeowner who pays the service call fees. The only cost that lies with the seller is the annual premium.

With all the expenses that come with listing and selling a home, even a $500 plan is only a small portion of what you’re spending on improvements, staging, agent fees and closing costs, along with covering the mortgage while the home is listed.

Cost factors

When a seller includes a home warranty as part of a home sale, the cost isn’t the same for every property. Several key variables drive the premium and service-fee structure. Below is a breakdown of the biggest major cost-drivers.

Home size and type

If your home is large or has many extra systems, expect the seller’s warranty cost to be on the more expensive end of the spectrum. Conversely, smaller homes or condos are typically less expensive. Expect to pay more if you’re in an older home or one with excess wear and tear, as breakdowns are more likely.

• Single-family homes: Usually set the baseline rate for most plans. For homes under a certain size (e.g., under 5,000 square feet), Home Warranty of America lists basic coverage priced $350 to $600 per year.
• Condos and townhomes: Often cheaper to cover, since many systems (such as roofs or exterior plumbing) are shared.
• Multiunit or duplex properties: According to American Home Shield, a single-family detached home often carries a higher base premium than a condo or townhouse, since many systems may be individually owned. This means they all require separate coverage.
• Larger square footage: More appliances and bigger systems mean more risk and higher costs.
• Older homes: May come with higher premiums or require inspections before approval.

Optional add-ons

Most standard home warranty plans include basic systems and appliances. Add-ons let sellers extend coverage for specific features. According to data from American Home Warranty, extended coverage (add-ons) can add $100 to $500 per year on top of your base costs.

Common add-ons include the following:

• Pools, spas, or septic systems: Common add-ons that can raise monthly rates by $10 to $20.
• Well pumps or sump pumps: Ideal for rural properties or homes with basements.
• Extra appliances: Coverage for a second fridge, washer, or wine cooler adds a small monthly fee.
• Roof leak protection: Increasingly popular, especially for older or weather-exposed homes.
• Premium plan tiers: Higher-cost options that lower service fees or include coverage for preexisting issues.

Location

Where you live can have a surprising impact on warranty prices. According to Cinch Home Services, an annual home warranty plan in New Hampshire costs over $650 per year, while an annual plan in California costs under $550.

• Regional labor and parts costs: According to Redfin, areas with higher cost of living or more expensive contractor rates drive higher premiums.
• Climate and system usage: Homes in extreme climates (very hot or cold) may incur more claims (e.g., HVAC breakdowns), which can push premiums higher.For example, a seller in Phoenix might pay more for HVAC-heavy coverage than a condo owner in Boston with fewer systems to protect.
• State/local regulations and tax: Some providers adjust or include taxes/fees based on state, and the type of home warranty regulation differs by state.

Seller home warranty savings and tips

Beyond the standard coverage options, many providers offer discounts, promotions, and flexible terms that can reduce seller costs while still adding value to the listing.

American Home Shield offers promotional codes and partner discounts. Active military or veterans may receive 20% off various plans. Choice Home Warranty consistently lists discounts such as “$75 off” store‑wide for new customers. Timing your purchase during peak promotional months (March, April, and October) can help. 2‑10 Home Buyers Warranty promotes complimentary seller coverage during the listing period in certain markets, meaning customers pay no premium during this time.

Some brokerages or agent programs offer “free listing period” seller warranties (e.g., through certain real‑estate firms) as part of their marketing packages.

How to get a sellers home warranty

When selling your home, your real estate agent is your single best resource to discuss the pros and cons of buying a sellers home warranty. This is why you should only work with a reputable, experienced agent whose guidance and advice you can trust. They’ll be able to recommend warranty companies they’ve worked with before and can vouch for. They’ll also have insider knowledge about the housing market in your area and can tell you whether a warranty will ultimately be worth it.

Consider following these steps if you’re interested in purchasing a home warranty:

1. Together with your real estate agent, discuss your coverage needs to determine the type of warranty you should choose. You may wish to get a warranty for appliances, one for home systems or a combination warranty.
2. You’ll also need to decide whether to get a limited warranty that ends once you sell your home or purchase an annual policy to be transferred to the new homeowner.
3. Read reviews and ratings for different warranty companies and ask friends and family for their recommendations if they’ve used a home warranty in the past.
4. Obtain quotes and coverage details from at least three warranty companies.
5. Once you have detailed policy information, compare your options. Remember to read the fine print, including exclusions and coverage limits, then decide on a plan.
6. If you plan to transfer the warranty over to the new owner, make sure you understand what this process entails and communicate this to potential buyers.

How to transfer a home warranty

Transferring a home warranty to the buyer is generally simple, but the exact process depends on the provider. Most companies require the seller to submit a transfer request in writing, provide the buyer’s contact information, and pay a transfer fee that typically costs between $50 and $100.

Once the transfer is processed, the buyer takes over coverage for the plan remainder, and the company issues updated policy documents in their name. Sellers should always check with their warranty provider to confirm deadlines and any additional requirements to ensure a smooth handoff.

» LEARN: Questions to ask a home warranty company

Bottom line

A sellers home warranty is a useful tool that can incentivize buyers. It can also provide the buyer peace of mind knowing that, at least for the first year of home ownership, the major systems and appliances are covered. It can also help reduce stress for the seller since any issues that come up during the listing period will be repaired or replaced easily.

Discuss the benefits of buying a sellers warranty with your real estate agent to decide whether it’s right for you.