A home warranty, also known as a home service contract, is a type of insurance policy that covers repairs or replacements of major home systems and appliances for a set period of time, typically one year. It is often included as a provision in a sales contract when buying or selling a home.

Home warranties offer peace of mind to both buyers and sellers as they provide protection against unexpected expenses of repairs or replacements that could occur after the sale is made. For buyers, it can also alleviate concerns about unknown issues with the home`s systems, such as the HVAC, plumbing, and electrical.

When it comes to including a home warranty in a sales contract, it`s important to note that it is negotiable. The seller may choose to offer to pay for the warranty, split the cost with the buyer, or suggest that the buyer purchase it on their own. In some cases, the buyer may even request that the seller purchase a home warranty as a condition of the sale.

While a home warranty can provide valuable protection for both parties, it`s important to read the contract carefully to understand exactly what is and isn`t covered. Home warranties typically have a deductible, exclusions, and limitations on coverage. It`s also important to note that a home warranty is not a substitute for a home inspection, which should be performed before the sale is finalized.

In addition to the protection it provides, a home warranty can also be a selling point for a home. Listing a home with a warranty can make it more attractive to potential buyers who are looking for added peace of mind and protection from unexpected expenses.

Overall, including a home warranty in a sales contract can be a wise decision for both buyers and sellers. It offers protection against unexpected expenses and can give buyers added confidence in their decision to purchase a home. Just be sure to read the contract carefully and understand the coverage and limitations.