Compare Home Warranty Options in Ohio
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Who Typically Pays for a Home Warranty?
In most U.S. real estate transactions, the seller pays for the home warranty, but this isn't a hard rule. Market dynamics, regional customs, and negotiation leverage all play a role in determining who ultimately covers the cost. Understanding how home warranties work in real estate puts you in a much stronger position whether you're buying or selling.
The most straightforward breakdown looks like this:
| Scenario | Who Typically Pays |
|---|---|
| Buyer's market (more supply than demand) | Seller pays as incentive |
| Seller's market (more demand than supply) | Buyer may pay on their own |
| Balanced / rebalancing market (2026) | Open to negotiation |
| New construction | Builder-provided warranty |
| "As-is" sale | Seller often covers as goodwill gesture |
According to the latest Redfin data, home sellers gave concessions to buyers in 46.2% of U.S. home sales in May 2026, up from 43.1% a year earlier and the highest May share in Redfin's records. In fact, by mid-2026 there are roughly 47% more sellers than buyers nationwide, and 18.5% of active listings have taken at least one price cut. Concessions like home warranties have become a mainstream deal-structuring tool as sellers use low-cost incentives to compete without slashing their list price. Industry data shows that home warranties are not required but are widely used as a seller-paid incentive, especially in competitive markets or with older homes, so buyers often need to ask for one directly to make it part of the deal.
Regional Variations Across the U.S.
While the seller-pays norm holds broadly across the country, Redfin's May 2026 concession data reveals dramatic regional differences:
- Sun Belt (concession-heavy markets): Nashville home sellers gave concessions to buyers in three-quarters (75.5%) of homebuying transactions in May, the highest share among the 28 major U.S. metros. Next are Charlotte (71.4%), Atlanta (68.7%), Phoenix (65.6%), and Raleigh (64.1%). Seller-funded warranties are common negotiating tools in these buyer-friendly metros.
- Northeast and West Coast (low-concession): Concessions were least common in New York, where just 2.9% of sellers gave concessions in May. Next come two Bay Area metros: San Jose (5.9%) and San Francisco (14.9%), followed by Boston (26.7%) and Chicago (27.5%). A $400 to $900 warranty may still be offered but is far less expected.
- Southeast (e.g., Florida): Seller-funded warranties are standard, with agents often bundling complimentary listing-period coverage. In most states, a seller's home warranty is a component of the buyer's home warranty plan, so there is no separate cost for seller's coverage. However, in Florida and California, a seller's home warranty plan does cost extra.
- Midwest: Seller-paid warranties are fairly common, especially on older homes with aging systems and appliances where buyer hesitation runs high.
Negotiation Strategies: Seller's Perspective
Sellers who proactively offer a home warranty gain a meaningful competitive edge. Offering a warranty when selling your home can help homes sell faster and reduce post-inspection renegotiations, two costly friction points in any deal.
Why Sellers Should Offer One
- Reduces buyer hesitation on older homes or homes with aging HVAC, plumbing, or appliances
- Lowers risk of post-inspection repair demands because buyers feel more protected knowing a warranty is in place
- Provides seller coverage during listing. If a covered system breaks before closing, the seller typically only pays the service fee, not the full repair bill
- Competes without cutting price. At $400 to $700, a warranty is far cheaper than dropping the list price by even 0.5%
How to Include It as a Seller Concession
Sellers can work with their real estate agent to include a home warranty as a named seller concession in the listing. Many home warranty providers offer free listing-period coverage when the seller commits to activating a buyer plan at closing. With American Home Shield, for example, sellers can add a Seller Coverage Option to the plan they'll provide to the buyer. It covers the same items as the ShieldEssential plan (heating, air conditioning, plumbing, and electrical) and can protect the seller for up to six months while the home is on the market, subject to a $1,500 aggregate cap across all trades during the listing period. Payment is deferred until closing, at which point the warranty transfers to the buyer and becomes effective the day of closing. That means the seller pays nothing upfront and only the annual premium is deducted from closing proceeds.
Real estate agents who are familiar with home warranty programs and partnerships can often help sellers access discounted plans and streamline the transfer at closing. If your existing plan is still active, review the warranty transfer process so remaining months of coverage carry over to the buyer with minimal paperwork.
Negotiation Strategies: Buyer's Perspective
Buyers have real leverage to request a seller-paid home warranty. Existing-home sales fell 1.7% in July 2026 to a seasonally adjusted annualized rate of 4.05 million units per NAR, and June came in at 4.09 million (a 2.4% month-over-month decline). That softness, combined with record-high seller concessions and a market where sellers currently outnumber buyers, shifts leverage back toward buyers across most metros.
How to Ask the Seller to Pay
- Include it in your initial offer. Add specific contract language such as: "Seller to provide and transfer a one-year home warranty at closing, covering major systems and appliances." This puts the expectation on the table from the start.
- Use it as post-inspection leverage. If the home inspection reveals an aging HVAC unit or older water heater, request a warranty instead of (or in addition to) a price reduction. It's often more palatable for sellers than cash concessions.
- Bundle it strategically. If the seller pushes back on closing cost credits, suggest swapping or combining with a home warranty. It's a non-cash concession that still delivers real value. Learn more about home warranty negotiation tactics that work in 2026.
- Frame it as a mutual win. Remind the seller (through your agent) that a $600 warranty is a far smaller ask than a $5,000 to $10,000 price drop.
Splitting the Cost
In some transactions, the cost is split. For example:
- Seller pays for a basic plan ($350 to $500/year), and buyer upgrades to a more comprehensive tier at their own cost
- Agent covers the cost as a client gift or closing incentive, a common practice among buyer's and seller's agents alike. Real estate agents are one of the most common purchasers of home warranties for home buyers, and many agents buy their buyers home warranty coverage as a gift at closing
- Buyer pays service fees while seller covers the annual premium
Understanding the full cost of a home warranty helps both parties negotiate from an informed position. In 2026, a home warranty costs about $73 a month on average per NerdWallet, or roughly $876 a year, with plans ranging from as low as $28 to as high as $191 per month. Service fees typically run about $75 to $150 per service call depending on provider and plan tier. For a fuller cost breakdown including hidden fees and add-ons, review our home warranty total cost analysis.
Tax Implications, Market Conditions & Agent Perspectives
Tax Implications: What You Need to Know
Neither buyers nor sellers get a significant tax benefit from a home warranty on a personal residence:
- Sellers: The IRS will not allow you to deduct the cost of a home warranty as a selling expense when computing the gain or loss on a sale of your home. Home warranties on personal residences are treated much like homeowners insurance and are not deductible. Deductible selling costs are typically limited to items like agent commissions, escrow fees, and legal expenses.
- Buyers: No tax deduction is available for a home warranty paid on a personal home. The IRS does not allow deductions for personal living expenses, and a home warranty on your primary residence falls into that category. Even a home office deduction typically does not make a whole-home warranty deductible, because the warranty covers the entire property rather than only the qualifying office area.
How 2026 Market Conditions Affect Negotiations
The 2026 housing market is characterized by:
- A decisive shift toward buyers. Redfin counts roughly 47% more sellers than buyers nationwide by mid-2026, and 18.5% of active listings have taken at least one price cut
- Softer existing-home sales. Per NAR, existing-home sales dropped 1.7% in July 2026 to a 4.05 million annualized rate, following June's 2.4% month-over-month decline to 4.09 million
- Modest home price growth. Realtor.com expects home prices to rise about 2.2% in 2026, while Zillow projects a much smaller 1.2% gain
- Mortgage rates near a 12-month high. Freddie Mac's average 30-year fixed rate rose to 6.69% as of August 6, 2026, the fifth consecutive weekly increase and the highest level since late July 2025. Bankrate's national survey showed 6.63% and The Mortgage Reports pegged rates near 6.76%, reflecting typical day-to-day variation
- Record-high seller concessions at 46.2% of May 2026 sales, per Redfin
- Balanced market territory. Realtor.com's Market Clock found the U.S. housing market entered 2026 in balance between buyers and sellers, closer to neutral than the seller-dominated conditions of 2021 and 2022
This environment makes a seller-paid home warranty one of the most efficient tools available. It costs the seller relatively little while addressing one of the buyer's biggest concerns: what happens if something breaks right after moving in?
Real Estate Agent Perspectives
Experienced agents on both sides of the transaction use home warranties strategically:
- Listing agents recommend sellers activate a warranty during the listing period to avoid out-of-pocket repair costs that could derail a deal
- Buyer's agents routinely include warranty requests in offer packages, especially for homes more than 10 to 15 years old
- Both sides recognize that a $400 to $900 warranty is a low-friction concession that helps keep deals together post-inspection. The Sun Belt is leading the way for regions offering concessions, mainly because the once red-hot housing market in those areas appears to be slowing down as the number of sellers outpaces the number of buyers, giving buyer's agents more room to ask for extras
If you're still deciding whether a warranty makes sense at all, compare the financial tradeoffs between a home warranty and self-funding repairs before committing. First-time buyers should also review our dedicated first-time buyer warranty guide to understand which negotiation points matter most on your first purchase.
Frequently Asked Questions
Does the buyer or seller typically pay for a home warranty?
In most U.S. real estate transactions, the seller pays for the home warranty as a concession to attract buyers and help close the deal. However, in competitive seller's markets where demand outpaces supply, buyers more often purchase their own warranty. In 2026's buyer-leaning market, with 46.2% of May sales including concessions per Redfin and roughly 47% more sellers than buyers nationwide, it's increasingly common for sellers to cover it.
Can a buyer request a home warranty as part of their offer?
Yes, and it's a very common practice in 2026. Buyers can include specific contract language requesting the seller provide a one-year home warranty at closing. It's most effective when framed as a modest ask relative to the purchase price, roughly $400 to $900 versus a potential $5,000+ price reduction, and is particularly compelling when paired with post-inspection findings on older systems.
Is a home warranty tax deductible for the seller?
No. The IRS does not allow home warranty costs to be deducted as a selling expense when calculating capital gains or losses on the sale of a personal residence. Deductible selling costs are limited to items like agent commissions, escrow fees, and legal expenses. The only exception is for rental or investment properties, where home warranty costs qualify as a deductible business expense on Schedule E.
How much does a seller-paid home warranty cost at closing?
In 2026, a standard one-year home warranty costs between $350 and $900 annually depending on coverage level and home size, with the national average around $73 per month or $876 per year per NerdWallet. Most basic plans covering major systems and appliances fall in the $400 to $700 range. The cost is typically deducted from the seller's proceeds at closing, so there's no upfront out-of-pocket expense for the seller.
What should be included in a home warranty as a seller concession?
At minimum, the warranty should cover major systems (HVAC, plumbing, electrical) and key appliances (refrigerator, dishwasher, oven, washer, and dryer). Both parties should agree on the provider and plan tier in writing, with the contract specifying that coverage transfers to the buyer at closing. For older homes, buyers may want to negotiate add-ons like water heater coverage, roof leak protection, or pool and spa equipment.