In our market, many buyers choose to or are advised by their agent to request a Home Warranty when writing up the purchase offer. I know of a listing agent who said it was not possible for him to help pay for the home warranty for the seller. Why not? The agent’s line of reasoning was that he felt he had already put in too much in marketing the property, yet the escrow was collapsing right before everyone’s eyes because the seller was stubborn and would not pay for it. I just can't believe that some agents won't pay for the warranty just to help close the deal—especially if it can ultimately be a decision of completing the transaction or having all the hard work up to date disappear into thin air.

Generally, Home Warranties are reasonably priced at several hundred dollars for a one year plan, which I don't think is that much. It's funny how some agents step over the dollars to get to the dimes. As listing or selling agents, it is wise to look at the overall picture and then to pay for the warranty cost if the situation depends on it so that the transaction can meet a satisfactory closure.

There are listing agents getting creative by stating upfront that they will pay for the Home Warranty to give to the buyers if the Sellers list their homes with them. I think this is a great marketing incentive but I don't know how effective it is. As a listing agent, do you usually pay for the Home Warranty to give to the Buyers?

I felt many real estate agents would have some valuable input into this matter and so the question was put to the table. I’ve summarized below the many responses from those who replied to the question. One agent responded that she agreed that many agents step over the dollars to get to the dimes and she makes whatever adjustments and credits are needed to close out the transaction successfully. Another agent indicated she pays for home inspections on the buyer side and her broker offers to pay for the home warranty. A few agents indicated the home warranty is a common staple in all their listings. They feel that for the cost, it is better to have it just in case any future problems arise. Several agents stated they offer to pay for the warranty as an incentive to get the listing and as a means to make the property more attractive to both the sellers and the buyers involved.

On the flip side, some agents responded that they normally do not pay for the warranty because they always urge their sellers to pay for it and they explain the advantage of getting the warranty as it protects the sellers. In fact, they will suggest that the seller include the warranty for the listing period since it makes the home easier to sell and many buyers are going to ask for it anyways. There were some cases cited where the sellers paid the $300-400 for the warranty, and they ended up making good use of the warranty while selling the home since they got the warranty company to cover some of the repairs requested by the buyers. So, overall in these cases, the sellers actually saved money by having the warranty in place since they would have otherwise had to pay for the repairs out of their own pocket. It is commonly believed that many sellers will have no issues with taking on the home warranty since they are aware of their expenses in selling a home.

The majority feedback from the agents was that if it was between getting a deal closed now or waiting for a new buyer, they definitely would pay for the warranty. Although, they would probably try to get the other agent to split the costs since many times, most agents will help with the home warranty costs if the seller refuses to pay for it. Should the selling agent refuse, the listing agent would pay for it just to get the deal done. As a part of skillfully putting together a transaction that meets everyone’s needs, if it makes sense for the listing agent to pick up the tab, they will take on the expense.