Short Answer
A home warranty is a service contract that covers the repair or replacement of major home systems and appliances for a set period, typically one year. It covers items like HVAC, plumbing, electrical, water heater, refrigerator, oven, and dishwasher. A home warranty costs $400 to $600 per year and is often paid by the seller as a sales incentive. For buyers, a home warranty provides peace of mind against unexpected repair costs in the first year of ownership.
A home warranty is different from homeowners insurance. Insurance covers damage from events like fire, storm, or theft. A home warranty covers mechanical breakdowns from normal wear and tear. When something breaks, you call the warranty company, pay a service fee of $75 to $125, and a technician is dispatched to diagnose and repair the issue. If the item cannot be repaired, the warranty company will replace it. Home warranties have coverage limits, exclusions, and service call fees. Some items, like pre-existing conditions or improper installations, may not be covered. Read the contract carefully to understand what is and is not covered. Buyers can purchase their own home warranty, or sellers often offer one as a concession. If you are buying a home with older systems or appliances, a home warranty can provide valuable protection during the first year when unexpected issues are most likely to arise.
Bob's Advice
Redfin Senior Agent · AI Certified Agent
I have seen home warranties save buyers thousands of dollars when an HVAC system failed or a water heater broke a month after closing. I have also seen buyers frustrated by coverage limits and service delays. The key is understanding what the warranty covers and what it does not. If the seller is offering a home warranty, review the contract carefully. If you are buying an older home or one with aging systems, consider purchasing a warranty yourself. Let us discuss whether a home warranty makes sense for your specific situation.
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