“Who usually pays for a home warranty, the buyer or the seller? And if the seller won’t or doesn’t pay, is it worth buying one?”
A home warranty policy is an insurance policy purchased during a home sale that covers some things that can go wrong with the plumbing, heating, electrical, and built-in appliances with a small deductible (aka “service call fee”).
The basic plan typically costs $300 to $400. For an extra charge, it can cover a/c, refrigerator, washer/dryer, pool, spa, roof, and septic.
Who pays for it varies with the market. In my experience…
- Buyer’s market: the seller pays about 80-90% of the time
- Balanced market: the seller pays about 70% of the time
- Seller’s market: the seller pays about 25% of the time
Like any insurance, you only REALLY know if it’s money well spent after the fact. Did you have a claim that was covered?
I usually advise clients to get one–partly for liability reasons and partly because I’d feel bad if a client had an expensive repair that would have been covered.
But the truth is that I’ve never purchased a home warranty for the dozens of homes and rental properties I’ve bought personally.