Home warranty
A service contract, not insurance, covering repair or replacement of home systems and appliances. Often offered by sellers as a buyer incentive. Coverage varies a lot; read the exclusions.
Every term like this one lights up in the step you're on.
Free to set up. No credit card.Part 1 of 4
Why a seller cares
A one-year home warranty is a common sweetener sellers offer, a few hundred dollars for a service contract on the systems and appliances. It reassures nervous buyers and covers less than its brochure suggests.
Part 2 of 4
A simple example
You include a $550 one-year home warranty in the listing. After closing, the buyer's water heater fails and the warranty pays for a replacement minus a $100 service fee.
| What happens after closing | What the warranty tends to do |
|---|---|
| The water heater fails | Covered, minus a service fee, up to a cap |
| The roof leaks | Usually not covered |
| A pre-existing problem the inspection noted | Often excluded |
A home warranty is a service contract with exclusions. As a seller's gesture it is cheap and it helps.
Part 3 of 4
What people get wrong
That a home warranty is insurance. It is a repair contract with caps and exclusions, and it is regulated differently.
Part 4 of 4 · where to read next
Where it appears in the sale
What a definition is, and what it isn't
Keighbor is a software company, not a law firm, brokerage, or tax adviser. This is general information, not legal, tax, financial, or real estate advice about your sale. Your situation may differ. Before acting on a contract, disclosure, title, tax, or pricing question, ask an appropriately licensed professional in your state.
Written and researched by Keighbor Research · drawn from the reference glossary · how we research and check what we publish
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