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Many benefits come with buying a home warranty when selling your home, but there are drawbacks to consider, too. 

Pros

• Peace of mind of home repair coverage

• Incentive for buyers

• Transferability to new owners

• Prevent post-sale issues

Cons

• Expensive cost

• Exclusions of certain features or appliances

• Coverage limits

• Often difficult to understand

• Potential wait for claim service 

On average, a home warranty costs about $1,100, ranging from $80 to $8,300, depending on your home size and its features, type of home warranty plan, and the coverage included. Your home’s location also factors into the cost of a home warranty, with areas with a higher cost of living experiencing increased warranty costs. Additional cost to consider include:

• Deductibles: $75–$125 per call

• Add-ons: $2–$35 per month

• Premiums: $200–$1,200 per year

Several factors make a home warranty worth it or not, especially the age of your home and the condition and age of the appliances in it. If you buy an older home with most or all original appliances, a warranty may be worth the investment as these home features are more likely to need repairs or replacements. However, if you’re buying a new-construction home, a warranty may already be included, and you may not need to use it for several years. In this case, purchasing add-ons may not be worth the cost until a few years later.

Offering a home warranty when selling can make your property more appealing to potential buyers. The warranty gives them peace of mind that many systems or appliances will be covered if they need to be repaired or replaced in the near future. Additionally, the home warranty may cover problems that arise during the home sale, such as a leaky roof or water in the basement.

The main types of home warranties cover the basic essentials, but additional plan types focus on specific areas such as:

• Appliance plan: This plan covers typical household appliances like refrigerators, stoves, washer and dryer, built-in microwaves, and dishwashers. It costs $360 and $540 per year. 

• System plan: Costing between $360 and $540 per year, this plan covers central home systems like HVAC, plumbing, electrical, and water heaters. 

• Combination plan: This plan type covers both systems and appliances, costing between $545 and $1,500.