You’ve seen it prominently displayed on real estate signs—”home warranty included.” It’s promoted as a major perk for buyers, but is it really? Let’s dig deeper.

You might be surprised to learn that home warranties have benefits for both buyers and sellers. For sellers, the home warranty can add a level of reassurance for potential purchasers, making the home more appealing. It also can serve as a safety net that allows a buyer to waive some inspection related repairs because they’re covered by the warranty. This can speed up the selling process—which benefits both parties.

Generally, home warranties work well for covering specific items like appliances, HVAC systems, and even water heaters. But more general problems may not end up being covered—even if the broken water heater is covered, it’s not likely that the water damage would be. Repairs involving plumbing, drywall repair, and patching are usually outside of the home warranty.

So is a home warranty worth it? We recommend home warranties for buyers seeking additional protection and sellers who want additional coverage while their house is on the market. Basic warranty packages begin at $500 and go up from there.

We advise that the best thing you can do when thinking about a home warranty is research. Learn what the warranty covers—and perhaps more importantly, what it doesn’t cover.

If you’re looking for a low-cost option that gives an additional level of protection, a home warranty could be right for you. If you’re on the fence, talk to your agent about whether the warranty could be a beneficial component of your home purchase or sale.

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