Should Agents Throw in a Home Warranty for Their Clients?

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Between the down payment, closing costs, moving costs, and any planned upgrades or renovations, the experience of buying a new home is an exciting, yet incredibly expensive path to step foot on. Buyers are usually spending the absolute maximum they can afford to cover the down payment and the upfront costs. Room for surprise payments, especially in that first year are simply not in the cards.

One way to avoid a huge “surprise” cost after move-in and give a little peace of mind is a home warranty plan. While insurance covers damage from weather and other unplanned disasters, a home warranty plan covers the major appliances in a home ranging from heating and cooling systems to washers and dryers. 

More and more, home warranty plans have become something that listing and selling agents alike, plan on throwing in with their offerings for different purposes. We’ve listed the most common reasons below:


Faster Sell at Higher Price

While the average home warranty plan runs between $400 - $600, the Service Industry Council found in a study that homes listed with a home warranty sell on average for $2,300 more and 11 days faster than home without a warranty. A faster sell along with an increased price is a win for both the listing agent and the seller.

“Tip the Scale”

With the cost of a home warranty being a small percentage of both the overall cost of the home and the commission, offering to buy the home warranty as the agent can be just enough to “tip the scale” for a deal that may otherwise not go through. Giving up $500 from a commission versus no commission can be well worth the investment.

Free Listing Coverage

When agents list a home that includes home warranty, the home warranty company will often provide free listing coverage. A small marketing perk on top of your bonus investment!

First Time Home Buyers

When trying to appeal to first-time home buyers, a home warranty plan can be the exact peace of mind the buyers need to make the purchase. Even though some say home warranty plans aren’t necessary, first-time buyers haven’t had experience with large appliance repairs and are looking for any safety net they can get. This safety net just may keep those first time buyers from walking away feeling as though the responsibility of the home is too much for them.

Added Coverage for “Extra’s”

Before throwing in a home warranty, be sure to read the fine print and pick a plan that works for the house. Nothing is worse than thinking you are buying a plan to keep your clients happy, only to find out that the specific type of heating that broke one month after closing wasn’t covered afterall! A key element of a home warranty plan for a house with a pool or spa, is that those items of “extra” responsibility can be covered. This can be especially helpful for homeowners who have never had the upkeep of a pool or spa before.


Last Ditch Effort

Similar to a listing agent, when a deal is about to fall through, everything rides on you as the agent. When it comes to getting a slightly reduced commission versus no commission, it is well worth your investment to throw it in. If all goes as planned, this allows you to make your commission after all, and move on to the next job! Because this is important to both agents, many agents will split the cost of throwing in the home warranty to save the deal. 

Marketing Package

To market yourself as a buying agent, any little incentive to choose you over another agent is a benefit. Home warranties are especially helpful when it comes to marketing a “First Time Home Buyer” package. As nervous first-time home buyers, they are looking for an agent with their best interest in mind and all the help they can get with navigating uncharted territory.

Closing Gift

Especially for an older, larger home, gifting a home warranty plan at closing can be the perfect closing gift that sends your clients into a lifetime of referrals. Clients remember and appreciate things that show you truly care about them now and once the papers are signed. More satisfied clients equal more referrals! 


Home warranties can be purchased at anytime, but usually the best deals are usually offered for people purchasing their home for coverage to start at the time of closing.

Do your research on both the warranty coverage and the company. It is important that the company has an outstanding reputation and that the most important appliances in the home are covered.

Educate yourself and your client on the protocol for when something breaks. There are things that will disqualify you from getting coverage that you want to be sure to stay away from.

Depending on how new the home is, some major appliances may still be covered with the manufacturer's warranty. Be sure to know how much of the house is already covered before investing!