Skip To Content

Pros & Cons of Home Warranties

Buyers and sellers have the option to purchase a home warranty on a resale home, similar to how a new home has a warranty for the first year of ownership.

A home warranty is a one-year residential service policy that provides repair or replacement coverage for covered systems and appliances in a home during the first year after closing.

It can be included at the time of listing to cover a property during the listing period and/or it can be added during contract negotiations for the buyer to have for a year after closing. The warranty is typically paid for at closing.

Key features of home warranties:

  • Warranty service is only covered by going through the warranty company’s toll free number.
  • The warranty company chooses the contractor who does work on the home.
  • The homeowner pays a trip fee each time a warranty contractor goes to the home.
  • Policies don’t cover 100% – review them for specific coverage and exclusions.

Real estate professionals are not in the warranty business so they are not experts on the specific coverage in various policies, which vary by each warranty company. It is important to read and understand the policy you choose.

Why Should I Buy a Home Warranty?

A home warranty helps protect your home investment, provides peace of mind, and reduces the risk for unexpected costly repairs on covered systems and appliances.

If you feel your budget is going to be tight and paying for repairs out of pocket would create a financial bind for you, a home warranty is a good way to minimize the financial surprise of a repair.

If you are a seller, most buyers prefer a home with a warranty, and you can opt for extra coverage as a seller during the listing period.

Why Should I Not Buy a Home Warranty?

If you are only willing to have contractors who you select work on your major systems and appliances, then you would not be happy with most home warranties. Most warranty companies require using their pre-selected vendors who they contracted with to provide service at a larger scale, typically at a negotiated rate.

If your major systems and appliances have been recently replaced and/or are already covered by manufacturer’s or contractor’s warranties.

How Do I Choose a Warranty Company?

Path & Post has several warranty companies we have worked with over the years and we are happy to provide our recommendations, based on experience with their customer service and claims handling.



Trackback from your site.

Leave a Reply


Find Your Path Forward

Where you live and make memories is important. We have unique strategies to accomplish what matters most in your life transition.