Should You Offer a Home Warranty? Pros & Cons for Today's Sellers
Home warranties have become a common negotiating chip in residential real estate. Sellers offer them to reassure buyers; buyers request them to reduce post-closing risk. But are they actually worth it — and when does offering one help versus hurt your position? The answer depends on your home's condition, your market, and what your Digs Report reveals.
What a home warranty covers (and what it doesn't)
A seller-provided home warranty typically covers major systems and appliances — HVAC, plumbing, electrical, water heater, kitchen appliances — for one year after closing. Coverage varies significantly by provider and plan. Critically, home warranties do not cover pre-existing conditions, structural issues, or items excluded in the fine print.
- Covered: mechanical failures of covered systems and appliances
- Not covered: pre-existing defects, cosmetic issues, code violations, roofs (in most base plans)
- Cost to seller: typically $400–$700 for a one-year plan
- Buyer benefit: reduced anxiety about immediate post-closing repair costs
When offering a warranty makes strategic sense
In a buyer's market or when your home has older systems, a warranty can be a low-cost way to keep buyers engaged and reduce inspection-related renegotiations. It signals good faith and shifts some post-closing risk off the buyer's plate — which can be the difference between an accepted offer and a passed one.
When a warranty is the wrong move
If your Digs Report shows that your major systems are in good condition and recently serviced, a warranty may be unnecessary — and offering one unprompted can actually raise questions about what you're trying to cover up. In a strong seller's market, warranties are rarely needed to attract competitive offers.
Using your Digs Report to make the call
Your Digs Report gives you an objective picture of your home's systems and their condition. If the HVAC is 12 years old and functioning but aging, a warranty is a smart hedge. If everything is recently updated and documented, skip it and let the data speak for itself. Data-driven decisions beat guesswork every time.