Real estate glossary
Home warranty
Also called: Home protection plan
A service contract that covers repair or replacement of certain home systems and appliances, usually for a year after closing.
A home warranty is a service contract, not insurance and not a guarantee about the home's condition. It typically covers things like heating, plumbing, electrical systems and some appliances for a set period, often one year, subject to a service fee per claim and the plan's exclusions.
Who pays for it is negotiable. Sometimes a seller offers one to reassure buyers; it is often listed in the purchase agreement with a maximum cost.
What it means for you as a seller
Offering a modest home warranty can make a buyer feel more comfortable with an older home, but it does not replace honest disclosures.
Related terms
Not legal or tax advice. These explanations are general information to help you follow your own transaction. Laws, forms and customs vary by state and county, and the terms of your own contract always control. For advice about your situation, talk to your real estate agent, a real estate attorney or a tax professional. Last updated .