What Is a Home Warranty Contingency in Real Estate?

✅ How a Home Warranty Contingency Works

A home warranty covers certain systems and appliances for one year after closing, such as:

• HVAC systems
• Electrical systems
• Plumbing systems
• Water heater
• Kitchen appliances
• Washer and dryer

When this contingency is included, the seller must purchase the warranty from a licensed provider and provide documentation before closing.

Sellers often choose a warranty costing between $350–$700, depending on coverage level.

💡 Why Buyers Request Home Warranty Contingencies

Buyers may request this contingency when:

• The HVAC or water heater is older
• The appliances show wear
• The buyer is purchasing their first home
• The inspection revealed minor issues, but not major repairs

Home warranty contingencies give buyers peace of mind if systems fail shortly after move-in.

📍 FSBO Tip: Use a Home Warranty to Strengthen Negotiations

FSBO sellers can offer a home warranty proactively to:

• Make the listing more attractive
• Offset minor inspection issues
• Reduce negotiation friction
• Reassure buyers purchasing an older home

Home warranties are cheaper than repair concessions and often resolve buyer concerns quickly.

If inspection issues arise, pair this with the repair request process or a seller concession.

⚠️ What a Home Warranty Does NOT Cover

Home warranties typically do NOT cover:

• Pre-existing conditions
• Structural issues
• Roof repairs
• Windows or foundation problems
• Major code violations

If major issues are discovered, buyers may rely on an inspection contingency instead.

📚 Related Contingency Guides

• Inspection Contingency
• Appraisal Contingency
• Financing Contingency
• Title Contingency
• Appraisal Gap Contingency
• Earnest Money Contingency

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