Are home warranties worth it? It really depends on your situation.

Who actually benefits from home warranties? I get asked that question a lot. Home warranties have been around a long time in our market. Some think they are a great addition to their property and others disagree. I want to break that down and talk about when they are and aren’t beneficial.

Home warranties cost a decent amount of money, anywhere from $500 to $1,000. They cover different kinds of systems and appliances: appliances, HVAC, and small plumbing issues. The average house has two to three issues a year, so whether it’s beneficial or not depends on your situation. 

If you have an older house, it might be a good deal. When I bought my house, I got a home warranty for free. It had an old HVAC system and older appliances back then that we’ve since upgraded, so I haven’t felt the need to buy a home warranty recently.

“You might want a home warranty, depending on your situation.”


If you’re a first-time buyer, you’ll probably be strapped on cash, so the warranty might not be a bad thing. If your fridge goes out, they’ll send someone to repair it for you. The keyword there is repair. In my experience, they likely won’t replace appliances for you until they’ve put a band-aid on them four or five times. So don’t expect them to replace appliances that break.

If you’ve just bought a brand new house, don’t even think about a home warranty. You’re not going to use it. More than likely, you’ll just pay $500 or $600 a year for very little. Some people just like to have insurance and know that something is covered if it breaks. That’s fine, but I wouldn’t say that mindset is for everybody. The last issue is a simple financial one.

The average house that we manage has two or three work orders a year that would cost $300. If the average home warranty costs $700 and charges you $75 every time they come out to fix something, you’re losing money if you only have two work orders. If you have three, you’re breaking even. So home warranties don’t save you money unless you have an old home that needs a lot of repairs.

If you have questions about home warranties or any other real estate topic, feel free to call to email me. I would love to hear from you.